Modest gains amid inflation concerns
Clues sought on what the Fed will do to fight ongoing worry
Wall Street capped another choppy day of trading Wednesday with modest gains for the major stock indexes, after investors combed the minutes from the Federal Reserve’s most recent interest rate policy meeting for clues about what the central bank may do next to fight inflation.
The S&P 500 rose 0.4 percent, its third-consecutive gain, after spending much of the morning and early afternoon wavering between gains and losses.
The Dow Jones Industrial Average rose 0.2 percent, while the the Nasdaq rose 0.3 percent.
Bond yields rose significantly. The yield on the 10-year Treasury, which helps set mortgage rates, jumped to 2.93 percent from 2.81 percent late Tuesday.
The minutes from the Fed’s two-day meeting last month show that the central bank’s policymakers concluded higher interest rates could be needed to restrain what they saw as a worrying trend: consumers starting to anticipate higher inflation.
The Fed’s minutes offered no major surprises for Wall Street, said Tom Martin, senior portfolio manager with Globalt Investments.
“What’s going to be much more interesting is what the Fed says in July,” Martin said.
The S&P 500 rose 13.69 points to 3,845.08. The
Dow gained 69.86 points to 31,037.68. The Nasdaq rose 39.61 points to 11,361.85. The Russell 2000 fell 13.78 points to 1,727.55.
Surging oil prices worsened inflation by sending gasoline prices in the U.S. to record highs. The price of U.S. crude oil is still up 36 percent for the year, but has been slipping throughout the week in a welcome sign for a market hoping for any signal that inflation could be easing.
U.S. crude oil fell 1 percent Wednesday. The price on Tuesday settled below $100 a barrel for the first time since early May.
Central banks have been raising interest rates in an attempt to temper inflation.
The Fed has been particularly aggressive in its shift from historically low interest rates at the height of the pandemic to unusually big rate increases now.
That has raised concerns that the central bank could go too far, hitting the brakes too hard on economic growth and bringing on a recession.
Wall Street will be closely watching the U.S. government’s release of employment data for June on Friday.