Wall Street subdued ahead of United States jobs data

The S&P 500 index has closed slightly higher as investors grapple with mixed messages from Federal Reserve Chair Jerome Powell and United States economic data ahead of upcoming labour and inflation reports that are expected to determine the central bank's future rate hiking path.

In his second day of testimony to Congress on Wednesday, Powell reaffirmed his message from Tuesday, of higher and potentially faster interest rate hikes, but said that debate was still under way with a decision hinging on data to be issued before the US central bank's policy meeting in two weeks.

Stocks had fallen more than 1.0 per cent on Tuesday after Powell's comments led investors to dramatically increase expectations for a 50-basis-point hike in March, with the majority of investors expecting a 25-basis-point hike before Powell spoke.

Data released on Wednesday did little to ease concerns about higher rates as it showed that US private payrolls increased more than expected in February.

Also, the US jobs report showed openings decreased to 10.8 million in January compared with economists' expectations for 10.5 million, and data for the prior month was revised higher.

Layoffs rose in January and 2022 job cuts were higher than initially thought while fewer people quit their jobs.

"Investors are digesting Fed Chair Powell's testimony to Congress and data indicating that the job market remains pretty hot," said Tom Hainlin, national investment strategist at US Bank Wealth Management, in Minneapolis.

Hainlin sees Friday's non-farm payroll report and next week's inflation readings for February as keys to whether the next rate hike will be 25 or 50 basis points.

Traders kept increasing bets for a Fed rate hike of 50 basis points later this month, with fed funds futures recently showing a roughly 80 per cent chance for such a hike, up from about 70 per cent on Tuesday and 31 per cent on Monday before Powell's first testimony, according to CME Group's FedWatch tool.

According to preliminary data, the S&P 500 gained 5.54 points, or 0.14 per cent, to end at 3,991.91 points, while the Nasdaq Composite gained 46.76 points, or 0.41 per cent, to 11,577.10.

The Dow Jones Industrial Average fell 62.15 points, or 0.19 per cent, to 32,794.31.

Tesla Inc slid after the US auto safety regulator said it was opening a preliminary investigation into 120,000 Model Y 2023 vehicles following reports about steering wheels falling off while driving.

Occidental Petroleum Corp gained after Warren Buffett's Berkshire Hathaway Inc increased its stake in the oil company to about 22.2 per cent.