Technology companies led U.S. stocks higher Wednesday in a broad rally that helped nudge the Dow Jones industrial average to a new high. In remarks before Congress, Federal Reserve Chair Janet Yellen raised the possibility that the central bank would consider slowing the pace of its interest rate increases if inflation remained persistently below its target level. The move assuaged concerns among some traders worried that the Fed has been moving too quickly to raise interest rates despite a slowdown in inflation and the U.S. economy’s sluggish growth of just 1.4 percent in the first quarter. Yellen’s remarks put investors in a buying mood and sent bond yields lower, stoking demand for real estate companies, utilities and other high-dividend paying stocks. Materials companies also posted hefty gains. In her semiannual testimony before the House Financial Services Committee, Yellen said the central bank expects to keep raising a key interest rate at a gradual pace, and raised the possibility that the pace of rate hikes would be slower than previously expected should inflation remain below its target level of 2 percent annual growth.
- AP. July 12, 2017