Wall Street Rising After Fed Minutes Meet Expectations

NEW YORK, May 25 (Reuters) – Wall Street ended higher on Wednesday after the release of minutes from the Federal Reserve’s latest monetary policy meeting, which showed policymakers unanimously believed the US economy was very strong as they struggled to contain it. of inflation without triggering a recession.

The minutes of the Federal Open Market Committee meeting in May, which culminated in a 50 basis point hike in the Fed’s target rate — the biggest jump in 22 years — showed that most committee members believed that further such rate hikes are “likely to be appropriate” at the upcoming June and July meetings. read more

“The uniformity of opinion is a good thing,” said Ross Mayfield, an investment strategy analyst at Baird in Louisville, Kentucky. “There is a lack of uncertainty about what needs to be done in the short term.”

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“By the time (the Fed) arrives in September, they’ll have enough economic data to go from there, so they’ll continue to have optionality,” Mayfield added.

All three major U.S. stock indices fluctuated earlier in the day amid mounting jitters from corporate and consumer surveys, economic data and corporate earnings reports pointing to a cooling U.S. economy — even as the Fed prepares to throw a bucket of cold water on it. throw to tackle decades-high inflation.

Fears that overly aggressive Fed rate hikes could send the economy into recession despite indications that inflation peaked in March has fueled those concerns.

“There is some belief in the idea that inflation is doing the job of (the Fed) for them,” Mayfield said. “There has already been a cooling down and financial conditions have tightened over the past month due to dollar strength and stock market weakness.”

A person walks past the New York Stock Exchange (NYSE) in Manhattan, New York City, US, May 19, 2022. REUTERS/Andrew Kelly

On Thursday, the Commerce Department will release its second look at first-quarter GDP, which analysts expect the contraction to be slightly less pronounced than the originally reported 1.4% yoy decline.

The Personal Consumption Expenditures (PCE) report follows on Friday, which will provide further clues about consumer spending and whether inflation peaked in March, as other indicators have suggested.

According to preliminary data, the S&P 500 (.SPX) gained 38.55 points, or 0.94%, to finish at 3,980.03 points, while the Nasdaq Composite (.IXIC) gained 166.41 points, or 1.48% to 11.430.86. The Dow Jones Industrial Average (.DJI) rose 192.51 points, or 0.60%, to 32,119.74.

Electric car maker Tesla Inc (TSLA.O) and retail powerhouse Amazon.com (AMZN.O) drove the strongest gains in the S&P 500 and the Nasdaq.

Chipmaker Nvidia Corp (NVDA.O) was ahead of the first quarter results expected after the bell.

Department store operator Nordstrom Inc (JWN.N) skyrocketed after its optimistic annual profit and revenue forecasts. read more

Fast food chain Wendy’s Co (WEN.O) jumped after a regulatory filing revealed that shareholder Nelson Peltz was considering a possible takeover bid for the company. read more

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Reporting by Stephen Culp; additional reporting by Anisha Sircar and Devik Jain in Bengaluru; adaptation by Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

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