Stocks lower as the Fed takes slightly hawkish tone

U.S. stocks turned mostly lower and Treasuries rose after minutes from the most recent Federal Reserve meeting showed that officials are leaning toward a slightly faster pace of tightening.

Oil rose to the highest level since 2014 amid escalating tensions in the Middle East and political dissonance in Washington.

The S&P 500 index retreated from earlier gains as investors digested the minutes from the Fed’s most recent meeting and grappled with President Donald Trump’s provocative comments about Russia and his warning that America is preparing to attack Syria.

The small-cap Russell 2000 index rose, as those companies tend to have less international exposure than larger businesses. Gold futures climbed for a fourth straight day.

“It’s shock and awe — tweets will continue, headlines will continue,” Yana Barton, equity portfolio manager at Eaton Vance, said in an interview at Bloomberg’s New York headquarters. “Yesterday we were up, today we’re down. Guess what? Volatility is the new norm.”

The S&P 500 gained a combined 2 percent on Monday and Tuesday as trade tensions between the U.S. and China appeared to ease.

The flight to higher-quality assets on Wednesday sent the 10-year Treasury yield down toward 2.78 percent. Aluminum headed for its biggest winning streak since 1988.

“Another sharp two-day rally in the stock market ... followed by another tweet from the President ... followed by another reversal of the rally,” Matt Maley, an equity strategist at Miller Tabak, wrote in an email to clients . “It’s becoming a broken record. The White House can say that the blame really goes to China and Russia ... and maybe they’re correct ... but there is no doubt that the President’s comments/ tweets have been THE catalyst to stop the sharp shortterm bounces we have seen in recent weeks.”