Reuters, March 8 – A day after remarks from Federal Reserve Chair Jerome Powell fueled bets of sharper rate increases, investors worried about a possible recession as U.S. stock indexes struggled to find direction on Wednesday.

Data indicated that U.S. private payrolls rose more than anticipated in February, indicating continued labor market strength ahead of the critical nonfarm payrolls report on Friday.

The benchmark S&P 500 (.SPX) saw its biggest percentage drop in two weeks after Powell told U.S. lawmakers on Tuesday that the Fed would likely need to increase interest rates more than expected in order to tame inflation. This news caused major U.S. stock indexes to fall more than 1%.
The likelihood that the U.S. central bank will increase interest rates by 50 basis points later this month has significantly increased among traders, with money market futures pricing in a nearly 70% chance of such a move.

At 10:00 a.m. ET, Powell will appear before the House Financial Services Committee once more.

A closely monitored part of the U.S. Treasury yield curve saw its deepest inversion in more than 40 years on Tuesday. An inversion of this kind is considered a dependable recession indicator