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Dow Closes at Record High as Powell Cautions on Inflation

The Dow posts its first record close since August as Fed Chair Powell says the central bank was on track to begin tapering the pace of its monthly bond purchases.

The Dow Jones Industrial Average closed at a record high for the first time since August in mixed trading Friday even as Federal Reserve Chairman Jerome Powell warned inflation pressures are likely to last well into next year.

The Dow finished up 74 points, or 0.21%, to 35,677, while the S&P 500 slipped 0.11%, snapping a 7-day winning streak. The Nasdaq ended down 0.82%, partly due to a warning from Snap  (SNAP) - Get Snap, Inc. Class A Report

The parent of the Snapchat  (SNAP) - Get Snap, Inc. Class A Report messaging app forecast weaker-than-expected holiday sales and cautioned that supply-chain disruptions would hit advertising spending in the social media sector over months ahead.

Facebook  (FB) - Get Facebook, Inc. Class A Report, Twitter  (TWTR) - Get Twitter, Inc. Report and Google parent Alphabet  (GOOGL) - Get Alphabet Inc. Class A Report all finished down.

Powell, speaking at a virtual panel discussion hosted by the Bank for International Settlements, said the central bank was "on track" to begin slowing the pace of its $120 billion in monthly bond purchases. That's the first of several steps required to start raising benchmark interest rates.

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Powell added that supply-chain bottlenecks and energy-price increases have created an inflation framework that the Fed's "patient" approach wasn't designed for.

"Supply constraints and elevated inflation are likely to last longer than previously expected and well into next year, and the same is true for pressure on wages," Powell said. "If we were to see a risk of inflation moving persistently higher, we would certainly use our tools."

The comments clipped gains for both the Dow Jones Industrial Average and the S&P 500 and put added pressure on tech shares.

Tesla  (TSLA) - Get Tesla Inc Report shares hit a fresh record, ending up 1.8%, and now have a $1 trillion valuation firmly in sight, as investors continue reward the clean-energy carmaker's record third quarter earnings.

Intel  (INTC) - Get Intel Corporation (INTC) Report shares slumped, finishing down 11.7%, after the semiconductor company reported weaker-than-expected third quarter sales and said profit margins would narrow as it ramps-up new technology chipmaking.