US stocks saw gains on Wednesday as Federal Reserve Chair Jerome Powell reiterated the central bank's cautious approach towards interest rate cuts, despite data showing a further slowdown in the US services industry growth for March. The Dow Jones Industrial Average rose marginally by 0.01% to 39,175.78, the S&P 500 climbed 0.29% to 5,220.76, and the Nasdaq Composite increased by 0.48% to 16,318.33.

Powell's speech affirmed the Fed's wait-and-see stance, highlighting that rate cuts would be considered carefully due to the strength of the US economy and recent higher-than-expected inflation data. The market reacted positively as investors expected a confirmation of potential rate cuts later in the year, with three cuts currently priced in by the market.

Data released by the Institute for Supply Management revealed that the non-manufacturing PMI declined for the second consecutive month in March, reaching 51.4 from 52.6 in February. While this figure was weaker than analysts had anticipated, it still indicated growth in the services industry, which accounts for over two-thirds of the US economy.

Energy stocks led the gains, with the energy sector seeing a rise of 0.7%. On the other hand, Ulta Beauty experienced a significant decline of 14.8% after issuing a downbeat forecast at an industry conference. E.l.f. Beauty and Coty followed suit, with their shares falling by 10.2% and 6% respectively.

Shares of Intel, a major chipmaker, dropped by 7.5% after disclosing an increase in operating losses for its foundry business in 2023. The losses amounted to $7 billion, higher than the $5.2 billion reported the previous year.

Traders are now pricing in a 57% chance of a 25 basis point interest rate cut by the Fed in June, according to CMEGroup's FedWatch tool. This is down from approximately 64% a week ago. Atlanta Fed President Raphael Bostic echoed this sentiment, stating that rates should likely not be reduced until the fourth quarter of this year.

Overall, the US stock market remained positive, with advancing issues outnumbering decliners on both the NYSE and Nasdaq. The S&P 500 recorded 32 new 52-week highs and 4 new lows, while the Nasdaq saw 105 new highs and 115 new lows.

Despite the slowdown in the services industry growth, analysts believe that the US economy continues to expand at a moderate pace. Investors will closely monitor further economic data and Fed statements for indications of future interest rate cuts and their potential impact on the market.