Fed Reserve Chair Powell pushed back on speculation that the U.S. political situation could affect the Fed’s decision to start cutting rates.

“Any decision that we make on rates, on any of our policy tools, it’s going to be very well-grounded in the data, and it will represent our best thinking about what is best for the American public in the near and medium term. That’s the promise that I will give and that all my colleagues will give,” Powell said.

The Federal Open Market Committee has two more meetings that will be completed before the U.S. presidential election, and its November meeting is the same week as election day.

— Jesse Pound

Investors don’t need to worry about the bull market ending if stocks take a dip, according to BMO Capital Markets.

“Stocks remain in a bull market even if stocks happen to pull back from current levels sometime between now and year end,” chief investment strategist Brian Belski wrote to clients on Tuesday.

Belski also noted that valuations may not be “as severe as are being advertised.” Still, he said stock picking is becoming more important as intra-stock correlation falls and fundamentals are dispersed.

Additionally, the strategist said investing around size and style has “fallen out of favor” with the market emphasis on large-cap growth names. But he said that could change in the coming months.

Belski pointed to technology and financials as having the best sector opportunities.

— Alex Harring

Here are the stocks on the move midday:

Intuit – Shares of the TurboTax parent company fell nearly 4% after it said it will slash 1,800 jobs, or about 10% of its workforce as it boosts investments in artificial intelligence. Intuit said it plans to rehire 1,800 people for engineering, product and consumer-focused roles.

LegalZoom.com – Shares plummeted more than 25% after the legal tech company announced the departure of CEO Dan Wernikoff and slashed its full-year revenue outlook. Chairman Jeffrey Stibel has been named as the company’s new CEO, effective immediately. In terms of revenue, LegalZoom now expects between $675 million and $685 million for the full year. The company’s prior guidance was between $700 million and $720 million.

Taiwan Semiconductor Manufacturing – The chip stock advanced 3% following the company’s revenue results. Though the company’s reported T$207.87 billion for the month of June was a 9.5% decrease from last month, it was a 32.9% increase from the year-ago period. For January through June this year, the company reported T$1.27 trillion, which is a 28% increase from the same period last year.

Read the full list here.

— Sean Conlon

Federal Reserve policymakers may soon start emphasizing the “maximum employment” piece of the central bank’s dual mandate, which targets the promotion of jobs and stable prices under the 1977 amendment to the Federal Reserve Act, according to Bank of America economist Michael Gapen in a note out Wednesday.

With recent signs that the labor market is softening, that is likely to result in lower interest rates, currently 5.25% to 5.50%, in late 2024 and possibly sooner, Gapen wrote. Under BofA’s reading of the tea leaves, “The Fed will be reducing its policy rate before year end. We think that happens in December, though a combination of soft data or further progress on inflation could bring earlier cuts.”

“Elevated inflation is not the only risk,” to the economy, Gapen wrote. “We draw this conclusion based on a few observations. First, in Powell’s written remarks to the Senate Banking Committee [Tuesday] he said, ‘elevated inflation is not the only risk we face.’ He noted this ‘in light of the progress made both in lowering inflation and in cooling the labor market over the past two years.’ The Fed sees more two-sided risks to the outlook as opposed to upside risks on inflation. This is no longer an overheating economy,” Gapen’s note read.

“Second, Powell was clear in saying ‘this is no longer an overheating economy.’ In prior months Powell had often referred to positive supply forces as lifting growth in economic activity and fueling employment without generating overheating effects. But he normally balanced these remarks by pointing to upside risk to inflation from a tight labor market that was only gradually coming into better balance. Now the view is that these overheating risks are largely behind us,” BofA added.

— Scott Schnipper

Longtime investor Bill Gross believes Elon Musk’s Tesla is behaving like a speculative play among retail investors.

“Tesla [is] acting like a meme stock — sagging fundamentals, straight up price action,” the former chief investment officer and co-founder of Pimco said in a post on social media site X on Tuesday afternoon. “But then there seems to be a new meme stock every other day now. Most are pump and dump.”

Tesla is on a 10-day winning streak, up a whopping 43.6% since June 24. The rally was initially triggered by Tesla’s second-quarter vehicle production and deliveries numbers that beat analysts’ expectations.

— Yun Li

The iShares MSCI Japan ETF (EWJ) is up more than 1% in morning trading and is on pace for a fifth positive day in six. The fund is also on track for its third straight weekly gain.

Japan has been a popular play for investors this year, with exchange-traded funds that focus on the country pulling in about $4 billion so far in 2024, according to FactSet. The BlackRock Investment Institute said in its midyear outlook that being overweight on Japanese stocks was one of its highest conviction calls.

— Jesse Pound, Gina Francolla

In testimony on Capitol Hill, Fed Reserve Chair Jerome Powell downplayed the idea that “greedflation,” or price gouging, was a major factor in the post-pandemic inflation.

“We look at it as this inflation has been caused by a combination of very strong demand and constrained supply,” Powell said, pointing to supply issues with automobiles as an example.

“It’s been very hard to track a connection with earnings and things,” Powell added.

— Jesse Pound

Federal Reserve Chair Jerome Powell has started his testimony in the U.S. House Financial Services Committee.

Wednesday’s remarks come after Powell told a Senate committee Tuesday that waiting too long to lower interest rates could hurt the economy. The central bank chief did not indicate a timeline for the first cut.

Watch a live stream of Powell’s testimony here.

— Jesse Pound

Carvana shares were up more than 6% on Wednesday after Needham upgraded the online car seller to buy from hold. That put the stock on track for its fifth positive session in six.

“We think CVNA can grow unit sales and industry share by leveraging its digital-first customer experience and under-utilized physical footprint,” analyst Chris Pierce wrote. “After a volatile past we see CVNA becoming a profitable secular growth story, with increasing retail unit sales and improving gross profit per unit metrics from leveraging a high-fixed-cost base.”

“We think the consensus retail unit estimate has troughed, and does not yet anticipate the approaching recovery, upside from management’s explicit pivot to unit growth and optimizations at acquired CVNA IRCs and Adesa locations, or the benefits of a stabilized balance sheet,” the analyst added.

The S&P 500 opened higher on Wednesday and was advanced for the seventh straight session.

The broad market index climbed 0.2% while the Nasdaq Composite also earned its own record after a 0.4% gain. The Dow Jones Industrial Average hovered near the flatline.

— Brian Evans

Check out the companies making headlines before the bell:

• Tesla — The electric vehicle maker gained nearly 1% after Goldman Sachs increased its stock price target by $73 to $248 per share on better-than-expected second-quarter deliveries. Tesla has booked 10 straight days of gains. Though Goldman increased its price target, the investment bank remains neutral on Tesla, with the new price target implying about 5% downside from Tuesday’s close of $262.33.
• Taiwan Semiconductor Manufacturing — Shares of the company, which makes semiconductor chips for artificial intelligence giants including Nvidia and Apple, added 2%. Taiwan Semiconductor reported revenue from April to June this year of T$673.51 billion, compared to the T$654.27 billion expected by analysts polled by LSEG, according to Reuters.
• 3M Company — Shares declined 1.2% after 3M announced its finance chief Monish Patolawala is leaving the company “to pursue another opportunity.” The change is effective July 31.

Read the full list here.

— Sarah Min

Shares of Taiwan Semiconductor were up 2% Wednesday morning after the company reported a recent earnings beat.

Taiwan Semiconductor reported revenue from April to June this year of T$673.51 billion, or $20.67 billion, compared to the T$654.27 billion expected by analysts polled by LSEG, according to Reuters. The company posted revenue of NT$207.87 billion in June 2024 alone, representing a 32.9% increase from this time last year.

Taiwan Semiconductor makes semiconductor chips for artificial intelligence giants including Nvidia and Apple.

— Lisa Kailai Han

Shares of European automaker Volkswagen ticked down Wednesday after the firm provided a warning on profits moving forward over slow electric vehicle demand. The company is also considering closing a plant in Brussels.

Volkswagen’s revised outlook now calls for operating return on sales in the range of 6.5% to 7%, down from a previous forecast of 7% to 7.5%.

European-listed shares of Volkswagen ticked down roughly 1%.

— Brian Evans

Shares of LegalZoom.com fell more than 23% after the company cut its full-year revenue guidance.

It now sees revenue coming in a range between $675 million and $685 million. The company had issued guidance of $700 million to $720 million. LegalZoom.com also announced CEO Dan Wernikoff resigned from his post, effective immediately.

The electric vehicle maker posted a 3.7% gain on Tuesday, marking a 10th straight positive session for Tesla.

Since its last down day on June 24, the stock has advanced roughly 43%. In the past month, the stock is up nearly 48%.

Even with the sharp run higher, shares are up a modest 5.6% in 2024, and they are still off more than 4% in the past year.

This latest climb for Tesla was aided by the car manufacturer’s second-quarter production and deliveries report, posted just last week. Deliveries for the period came in at 443,956, compared to the 439,000 anticipated by analysts, per StreetAccount.

— Darla Mercado, Jason Gewirtz