(Bloomberg) — US stocks ended Wednesday’s session with gains as traders weighed the concerns Federal Reserve officials voiced during their last policy meeting against key data showing the economy is slowing. Treasury yields slipped.
(Bloomberg) — US stocks ended Wednesday’s session with gains as traders weighed the concerns Federal Reserve officials voiced during their last policy meeting against key data showing the economy is slowing. Treasury yields slipped.
The S&P 500 snapped two days of losses, but not without some drama following the release of minutes from the Federal Open Market Committee’s December meeting. They showed officials cautioning that an “unwarranted” loosening of financial conditions — a cross-asset measure of stress among markets — would complicate efforts to reach their inflation target. Policy makers were also concerned that inflation will remain entrenched if the labor market stays resilient.
The 10-year Treasury yield ended at 3.68%, while the dollar retreated. Crude slumped in New York.
Many officials highlighted the need to curb inflation without slowing the economy too much, which somewhat heartened investors. But ultimately, the meeting minutes emphasized that the Fed will have a lot more to do if markets do not cooperate.
“The Fed wanted to send a message to the market that they would not be easing or cutting rates anytime in 2023,” said Joe Gilbert, portfolio manager for Integrity Asset Management. “However, we must remember that the Fed also did not forecast raising rates by 400 basis points twelve months ago, so their forecasting ability of their own actions is sometimes quizzical.”
Read More: Fed Affirms Inflation Resolve, Pushes Back Against Rate-Cut Bets
Investors also assessed slew of economic data on Wednesday. Latest numbers from the Institute for Supply Management underscored improving supply chain conditions, declining input prices and slower demand — all developments the Fed would welcome. But job openings data pointed to a robust labor market, which rattled investors earlier in the session.
All eyes will be on the nonfarm payrolls report on Friday, for any signs of possible softening in the labor market.
Read More: Wall Street’s Top Bear Sees Another Big Down Year for S&P 500
Key events this week:
- Eurozone PPI, Thursday
- US ADP employment change, initial jobless claims, Thursday
- China trade, Caixin PMI, Thursday
- Eurozone retail sales, CPI, consumer confidence, Friday
- Germany factory orders, Friday
- US nonfarm payrolls, factory orders, durable goods, Friday
The main markets moves are:
Stocks
- The S&P 500 rose 0.7% as of 4 p.m. New York time
- The Nasdaq 100 rose 0.5%
- The Dow Jones Industrial Average rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro rose 0.5% to $1.0603
- The British pound rose 0.8% to $1.2059
- The Japanese yen fell 1.3% to 132.69 per dollar
Cryptocurrencies
- Bitcoin rose 0.8% to $16,800.86
- Ether rose 3.3% to $1,250.87
Bonds
- The yield on 10-year Treasuries declined five basis points to 3.69%
- Germany’s 10-year yield declined 12 basis points to 2.27%
- Britain’s 10-year yield declined 16 basis points to 3.49%
Commodities
- West Texas Intermediate crude fell 5% to $73.07 a barrel
- Gold futures rose 0.7% to $1,859.10 an ounce
This story was produced with the assistance of Bloomberg Automation.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.