Wall Street edged lower on Tuesday after Federal Reserve Chair Janet Yellen said the central bank will likely need to raise interest rates at an upcoming meeting, but expressed uncertainty over economic policy under the Trump administration. She did not say if the Fed still planned for three rate hikes this year, as it had signaled in December. Nor did she give indications if a hike might come at its meeting in March or in June, as most analysts expect.
While President Donald Trump's pro-business stance sparked a record-setting rally in equities, he has given scant detail on his policies, giving the Fed limited visibility on the direction of the economy. "It is too early to know what policy changes will be put in place or how their economic effects will unfold," Yellen said.
Yellen's rate hike comments lifted the dollar and US Treasury yields, while boosting the S&P financial sector, which rose 0.8 percent. Bank stocks were the top gainers on the S&P and the KBW banking index rose 1.3 percent. Nine of the 11 major S&P sectors were lower, led by the high dividend-yielding utilities and real estate sectors, both of which were down more than 1 percent.
At 10:49 am EDT the Dow Jones Industrial Average was down 9.17 points, or 0.04 percent, at 20,402.99, the S&P 500 was down 3.96 points, or 0.17 percent, at 2,324.29 and the Nasdaq Composite was down 9.32 points, or 0.16 percent, at 5,754.63. General Motors was the biggest percentage gainer on the S&P, rising 3.9 percent after Peugeot-owner PSA Group said it is in talks to buy GM's European Opel business. The prospects of sector consolidation caused Fiat to jump 3.7 percent, while Ford gained 0.6 percent.