Stocks rise after release of Fed meeting minutes

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%, 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%, while the the Nasdaq rose 0.3%.

Small company stocks remained in a slump, however, a sign that investors are worried about economic growth. The Russell 2000 gave up 0.8%.

Bond yields rose significantly. The yield on the 10-year Treasury, which helps set mortgage rates, jumped to 2.93% from 2.81% 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 policymakers also acknowledged that more rate hikes could weaken the economy.

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.

Major indexes have swung from sharp losses to gains on a day-to-day and even hourto-hour basis lately, reflecting investors’ worries about inflation, rising interest rates and a potential recession. The broader market, though, is still mired in a deep slump that has dragged the S&P 500 into a bear market, over 20% below its most recent high.

Wall Street’s key concern centers around the Federal Reserve’s effort to rein in inflation, and the risk its plan could send the economy into a recession.

Inflation has squeezed businesses and consumers throughout the year. Its grip tightened after Russia invaded Ukraine in February and as China locked down several key cities to contain rising COVID-19 cases, which worsened supply chain problems.

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% 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% Wednesday. The price on Tuesday settled below $100 a barrel for the first time since early May.