US stocks surrender gains to close in negative territory after Powell comments

ANKARA

US stock market indexes surrendered their gains from an earlier rally to close in negative territory Wednesday after comments by Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average plummeted 461 points, or 1.34%, to 34,022, despite the blue chip index gaining over 520 points during the session.

The S&P 500 decreased 54 points, or 1.18%, to close at 4,513.

The Nasdaq dove 283 points, or 1.83%, to end the day 15,254, as the tech-heavy index closed below its 50-day moving average.

Powell said earlier that the Fed is ready to use all of its tools against high inflation during testimony before the House of Representatives Financial Services Committee.

The risks of high inflation have "clearly risen" and the Fed's monetary policy would adapt accordingly, he said, adding inflation "has spread more broadly in the economy."

Powell's comments came a day after his remarks before the Senate Banking Committee that the Fed would discuss winding up its asset purchases at a faster rate at its next meeting on Dec. 14-15.

Despite its earlier retreat, the VIX volatility index, known as the fear index, climbed above the level of 30 for the first time since March 5 by gaining 18.8% to 32.30.

The dollar index climbed above 96 again by gaining 0.12% to 96.11, while the yield on 10-year US Treasury notes, on the other hand, fell 1.4% to 1.421%.

Precious metals were mixed, with gold adding 0.3% to $1,779 an ounce but silver losing 2.6% to $22.24.

Oil prices were down, with Brent crude falling 1.2% to $68.40 per barrel and US benchmark West Texas Intermediate crude losing 1.6% to $65.11.