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Stock Market Today - 1/11 -Stocks Close Higher as Powell Repeats Inflation Fighting Vow

Stocks end higher as Fed Chair Jerome Powell vows ed to 'prevent higher inflation from becoming entrenched.'

Updated at 4:15 pm U.S. EST

Stocks finished higher Tuesday, snapping a six-day losing streak for the S&P 500, as Federal Reserve Chairman Jerome Powell told lawmakers on the Senate Banking Committee that he expects inflationary pressures to last well into the end of this year.

The Dow Jones Industrial Average finished up 183 points, or 0.51% to 36,252, while the S&P 500 gained 0.92%.

The Nasdaq advanced 1.41% as benchmark 10-year Treasury note yields slipped to 1.741% in New York trading and ahead of Wednesday's auction of $36 billion in new notes.

Correcting himself during his confirmation hearing on Capitol Hill, Powell said inflationary pressures will persist throughout 2022, but mitigate in 2023, as the Fed adapts its monetary policy stance with interest rate hikes, an end to bond purchases and a the potential reduction of its multi-trillion dollar balance sheet. 

In prepared remarks for his confirmation hearing testimony on Capitol Hill, Powell had said the country's post-pandemic recovery will be "different in some respects", but vowed to "prevent higher inflation from becoming entrenched" in the world's largest economy.

Tech had its strongest rally in nearly two years on Monday, however, as investors continue to grapple with inflation concerns that are compounded by a worrying surge in global Covid infections.

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Omicron's relentless wave continues to sweep across the country, with daily infections hitting a record 1.35 million yesterday, lifting the seven-day average to around 700,000 -- a level last seen in January 2021 -- raising concerns that growth will be difficult to maintain in the face of business closures, travel restrictions and self-isolations.

Markets are also bracing for what could be at least four rate hikes between now and the end of the year, according to JPMorgan  (JPM) - Get JPMorgan Chase & Co. Report CEO Jamie Dimon, with the first coming as early as March, a timeline Atlanta Fed President Raphael Bostic said Tuesday would be a "reasonable possibility".

Investors are banking on interest-rate increases to fuel financial-sector profits, The Wall Street Journal reported. The KBW Nasdaq Bank Index rose 10% last week, the largest percentage gain since November 2020, the paper reported.

In terms of individual stocks, Tesla  (TSLA) - Get Tesla Inc Report shares ended slightly higher after data from China showing record December sales in the world's biggest car market and a price target increase from Morgan Stanley.

Pfizer  (PFE) - Get Pfizer Inc. Report shares rose nearly 1% after the drugmaker said it's developing a hybrid vaccine that protects against Covid's original strain as well as the newly-emerged Omicron variant. 

Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report gained 4% after analysts at KeyBanc boosted their rating and price target for the chipmaker, citing growth in data center demand and the impact of its $35 billion takeover of Xilinx  (XLNX) - Get Xilinx, Inc. Report.

In overseas markets, Europe's Stoxx 600 was marked 0.9% higher by mid-afternoon trading in Frankfurt, powered by a follow-on rally in tech stocks and solid gains for defensive sectors such as healthcare, while the region-wide MSCI ex-Japan index in Asia closed out the session with a 0.22% gain.