US close: Stocks firmer as Fed signals half-point rate hikes

Wall Street stocks closed in positive territory on Wednesday, as market participants digested minutes from the Federal Reserve's most recent policy meeting, which suggested the central bank was prepared to be flexible with interest rate hikes.

At the close, the Dow Jones Industrial Average was up 0.6% at 32,120.28, as the S&P 500 added 0.95% to 3,978.73 and the Nasdaq Composite advanced 1.51% to 11,434.74.

The Dow closed 191.66 points higher on Wednesday, extending the gains it recorded on Tuesday, when the blue-chip index staged a late rally amid a decline in the yield of the benchmark 10-year Treasury note.

Wednesday's primary focus was the minutes from the Fed’s May meeting, which showed policymakers were supportive of 50-basis point rises as it moves its interest rate target “expeditiously towards neutral”.

Most officials on the Federal Open Market Committee agreed half-point increases would “likely be appropriate at the next couple of meetings”, the minutes read.

They added that “a number of participants” believed inflationary pressures “may no longer be worsening”, although they added it was too soon to be sure.

Chairman Jerome Powell said that inflation was "much too high" and that the Fed understood "the hardship" it was causing.

"We're moving expeditiously to bring it back down," he said.

Naeem Aslam, chief market analyst at AvaTrade, said it was “clear” that the Fed was going to be running “on autopilot”, and would be paying close attention to economic data.

“The fact that the Fed will only increase the rates by 50-basis points has pushed the dollar index further lower and as a result we have seen the gold price moving higher.

“For the equity traders, the FOMC minutes were music to their ears as this is exactly what they wanted to hear,” Aslam said.

“No one wants to see the Fed being overly hawkish when there is potential fear of a recession taking place.”

Elsewhere on the macro front, US mortgage applications declined 1.2% in the week ended 20 May, according to the Mortgage Bankers Association of America, as heightened prices and elevated rates continued to weigh on affordability.

The drop followed an 11% drop in the previous week.

Finally, US durable goods orders rose 0.4% month-on-month to $265.3bn in April, according to the Census Bureau, following a downwardly revised 0.6% increase in March and short of forecasts for a reading of 0.6%.

In the corporate space, Nordstrom shares jumped 14.02% after the high-end department store beat sales expectations and upped its full-year guidance amid a surge in demand.

Housebuilder Toll Brothers was ahead 7.97%, after it posted quarterly results overnight that came in ahead of analysts' expectations.

Dick's Sporting Goods reversed earlier losses to close 9.69% firmer, even after the retailer lowered full-year guidance following a 7.5% first-quarter sales decline.

Reporting by Josh White at Sharecast.com. Additional reporting by Iain Gilbert.

Dow Jones - Risers

American Express Co. (AXP) $160.56 3.14%
Boeing Co. (BA) $122.06 2.23%
Home Depot Inc. (HD) $293.57 1.96%
Caterpillar Inc. (CAT) $209.31 1.78%
Salesforce.Com Inc. (CRM) $159.65 1.73%
Walt Disney Co. (DIS) $103.26 1.64%
Chevron Corp. (CVX) $175.41 1.60%
Intel Corp. (INTC) $42.20 1.27%
Microsoft Corp. (MSFT) $262.52 1.12%
Verizon Communications Inc. (VZ) $51.24 1.10%

Dow Jones - Fallers

Procter & Gamble Co. (PG) $145.21 -1.64%
Johnson & Johnson (JNJ) $179.57 -0.98%
Merck & Co. Inc. (MRK) $93.75 -0.94%
Walmart Inc. (WMT) $123.37 -0.61%
McDonald's Corp. (MCD) $244.01 -0.21%
Travelers Company Inc. (TRV) $173.69 -0.18%
Dowdupont Inc. (DWDP) $30.52 0.00%
Honeywell International Inc. (HON) $230.94 0.00%
3M Co. (MMM) $145.82 0.03%
Coca-Cola Co. (KO) $64.07 0.08%

S&P 500 - Risers

Nordstrom Inc. (JWN) $23.58 14.02%
Gap Inc. (GPS) $10.65 12.46%
Kohls Corp. (KSS) $40.51 11.89%
Macy's Inc. (M) $19.21 9.09%
Best Buy Co. Inc. (BBY) $80.03 8.97%
Bath & Body Works, Inc. (BBWI) $39.28 8.71%
Intuit Inc. (INTU) $388.45 8.21%
Under Armour, Inc. (UA) $8.80 7.19%
Under Armour Inc. Class A (UAA) $9.75 7.03%
Foot Locker Inc. (FL) $32.09 6.65%

S&P 500 - Fallers

Agilent Technologies Inc. (A) $120.38 -3.24%
Hologic Inc. (HOLX) $76.00 -3.05%
Waters Corp. (WAT) $307.81 -3.04%
Thermo Fisher Scientific Inc. (TMO) $534.56 -2.65%
Albemarle Corp. (ALB) $237.51 -2.32%
Wisconsin Energy Corp. (WEC) $105.81 -2.28%
Centene Corp. (CNC) $85.31 -2.18%
Becton, Dickinson & Company (BDX) $252.17 -2.05%
Flowserve Corp. (FLS) $30.22 -1.79%
Procter & Gamble Co. (PG) $145.21 -1.64%

Nasdaq 100 - Risers

Intuit Inc. (INTU) $388.45 8.21%
Qurate Retail Inc. (QRTEA) $3.47 6.77%
Dish Network Corp. (DISH) $21.96 6.04%
Expedia Group Inc. (EXPE) $123.73 5.97%
Nvidia Corp. (NVDA) $169.75 5.08%
Tesla Inc (TSLA) $658.80 4.88%
Ross Stores Inc. (ROST) $81.36 4.83%
Booking Holdings Inc. (BKNG) $2,147.22 4.74%
Marriott International - Class A (MAR) $159.55 4.53%
Western Digital Corp. (WDC) $59.10 4.42%

Nasdaq 100 - Fallers

Hologic Inc. (HOLX) $76.00 -3.05%
Mondelez International Inc. (MDLZ) $62.37 -1.00%
Cintas Corp. (CTAS) $367.65 -0.89%
Fastenal Co. (FAST) $51.68 -0.60%
Take-Two Interactive Software Inc. (TTWO) $122.08 -0.50%
Starbucks Corp. (SBUX) $72.48 -0.33%
NortonLifeLock Inc. (NLOK) $24.57 -0.20%
Check Point Software Technologies Ltd. (CHKP) $123.29 -0.16%
Alphabet Inc. Class A (GOOGL) $2,116.10 -0.16%
Verisk Analytics Inc. (VRSK) $170.72 -0.13%