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

Powell’s nomination was largely welcomed by investors hoping for no big changes in the Fed as it guides the economy through a post-COVID recovery. The central bank is set to herald a return to pre-pandemic policy by end-2022.

Fed Governor Lael Brainard, who was the other top candidate for the job, will be vice chair, the White House said.

After being sharply higher for much of the session, the Dow Jones closed 0.1 per cent higher, the S&P 500 fell by 0.3 per cent and the Nasdaq Composite shed 1.3 per cent. The Australian sharemarket is poised to open lower with futures at 7.59am AEDT pointing to a fall of 12 points or 0.2 per cent, at the open.

“Markets like predictability ... while Brainard may have been a fine choice, the markets would not know what to expect from her even though the general consensus was that it meant lower rates for longer,” said Randy Frederick, managing director of trading and derivatives, Charles Schwab, Austin, Texas.

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

“This is sort of another confirmation that the Fed has a plan.”

Futures contracts tied to the Fed’s policy rate indicated that money markets are now expecting the US central bank to raise interest rates by 25 basis points by next June versus a previous estimate of July.