US stocks swung between small gains and sizable losses, ending mixed after a first-quarter gross domestic product estimate that was revised lower and as Chairman Jerome Powell said the Federal Reserve can lower inflation while keeping the labor market strong.
The Dow Jones Industrial Average rose 0.3% to 31,029.31, while the S&P 500 fell 0.1% at 3,818.83 and the Nasdaq Composite ended fractionally lower at 11,177.89 on Wednesday. Energy and real estate led the decliners, while healthcare and consumer staples sectors were the top gainers.
The US 10-year yield sank 10.5 basis points to 3.10%.
West Texas Intermediate crude oil futures slipped 2.1% to $109.43 per barrel.
US gross domestic product was revised down in the third estimate for the first quarter to a 1.6% annualized drop from a 1.5% decline in the second estimate, marking the first economic contraction since the second quarter of 2020.
Personal consumption expenditures were revised lower to a 1.8% growth pace from the previous estimate of a 3.1% gain.
Monetary policy is a "blunt tool," and the war in Ukraine presents challenges, Powell said in remarks to a European Central Bank forum on central banking. He, however, is of the view that the Fed can achieve a soft landing that would slow inflation and economic growth while keeping the labor market strong and not tipping the economy into recession. There is always the possibility that the Fed could raise rates too far, but Powell said he does not see that as the most likely outcome.
In corporate news, General Mills (GIS) shares jumped 6.4%, the most in the S&P 500, after it reported fiscal fourth-quarter adjusted earnings of $1.12 per diluted share, up from $0.91 a year earlier. Analysts polled by Capital IQ forecast $1.01.
Morgan Stanley lowered Carnival's (CCL) price target to $7 from $13 and introduced a new $0 bear case given escalating leverage and after the company posted "weak" Q2 results and guidance for full-year 2022 and 2023. Shares of Carnival slumped 14%, the worst performer on the S&P 500. Shares of competitors Royal Caribbean (RCL) and Norwegian Cruise Line Holdings (NCLH) were also among the steepest decliners, trading down 10.3% and 9.3%, respectively.
Gold was down 0.1% to $1,820.10 per troy ounce, and silver fell 0.6% to $20.75 per ounce.