Wall Street puts U.S. Fed aside amid quarter-end battle

Wall Street traders took Jerome Powell’s hawkish signals in stride, with bond yields dropping. Stocks fluctuated in one of the last few days of a quarter that saw a blistering artificial-intelligence rally.

The tug of war within the S&P 500’s most-influential group dictated trading Wednesday, with a slide in chipmakers offsetting gains in megacaps like Apple Inc. and Microsoft Corp. After the closing bell, Micron Technology Inc. jumped on an upbeat forecast. The biggest banks passed the Federal Reserve’s annual stress test, clearing a key hurdle for returning billions of dollars to investors.

Swap market bets on further tightening barely budged after the Fed’s chief downplayed the odds of a recession while signaling officials could hike for two straight meetings, if needed.

“Quarter-end positioning could drive volatility through the end of the week,” said Mark Hackett, chief of investment research at Nationwide. “Investors are increasingly pricing in a soft landing. A reacceleration in earnings will be required to drive the next phase of the market move.”