The S&P 500 hit an intra-day high after President Joe Biden picked Federal Reserve Chairman Jerome Powell to lead the central bank for a second term before a late swoon saw it close in the red .

Powell’s appointment has been widely praised by investors who were hoping there weren’t any big changes within the Fed as she guides the economy through a post-COVID recovery. The central bank is expected to announce a return to pre-pandemic policy by the end of 2022.

Fed Governor Lael Brainard, who was the other leading candidate for the post, will be vice president, the White House has announced.

After being significantly higher for much of the session, the Dow Jones closed 0.1% higher, the S&P 500 fell 0.3% and the Nasdaq Composite lost 1.3%. The Australian equity market is set to open lower with futures at 7:59 a.m. AEDT showing a decline of 12 points, or 0.2%, to open.

“Markets like predictability… while Brainard may have been a good choice, markets wouldn’t know what to expect from it even if the general consensus was that it meant lower rates for longer,” said said Randy Frederick, Managing Director of Trading and Derivatives, Charles Schwab, Austin, Texas.

“The message is that we are on the right track to reduce the tapering and we are heading towards higher interest rates, which will most likely be raised in the middle of next year, and I think Wall Street has already digested it. most of that, ”said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

“It’s kind of another confirmation that the Fed has a plan.”

Fed policy rate futures have indicated that money markets now expect the U.S. central bank to raise interest rates by 25 basis points by next June, from a previous estimate of July.

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