Stocks Slip On Powell Rates Comments While Yellen Notes Fading Recession Risks

Powell Says Further Hikes LikelyUS markets ended the day lower yesterday and are on course for a negative week. The conclusion from Powell’s two-day testimony at the Senate is that further hikes are likely on the way this year. While the Fed chair offered little in the way of new information, his view was in line with the guidance offered at the recent FOMC meeting in favour of expecting further hikes from the central bank.Yellen: Recession Risks Have DippedAside from Powell’s comments, we also had Yellen on the wires yesterday. The Treasury Secretary, and former Fed chairwoman, noted that she felt US recession risks had fallen recently. Pointing to cooling inflation and a strong labour market, Yellen cited her view that while a recession was still a possibility, given the Fed’s tightening campaign, such a scenario was no longer the expected base case. These comments did little to stop stocks from falling however.US PMIs Up NextLooking ahead today, the latest round of US factory and non-factory sector PMIs will give a fresh insight into the health of the US economy. While any upside might be welcomed in terms of endorsing Yellen’s view that a recession will be avoided, that same strength might also feed into expectations of further rate hikes, keeping stocks pressured near-term.Technical ViewsDow JonesThe recent rally in the Dow saw the market once again stalling into a test of the 34523.58 level. This remains a key resistance level for the index which, if broken, opens the way for a test of the 35503.24 level above. To the downside, 33576.05 Is the next support to note.