US close: Markets finish higher as investors mull Fed minutes

Nasdaq 100

20,394.13

12:15 15/11/24

-2.40%

-502.54

Wall Street's main market averages finished in the green on Wednesday, with Treasury yields slipping after the release of the minutes from the Federal Open Market Committee’s May meeting.

Dow Jones I.A.

43,444.99

04:30 15/10/20

n/a

The Dow Jones Industrial Average ended up 0.36% at 21,012.41, while the S&P 500 finished 0.25% higher at 2,404.39 and the Nasdaq 100 was firmer by 0.47% at 5,730.30.

In bond markets, the US benchmark 10-year note yield was down after the release of the Fed minutes, to trade at 2.255%, while the two-year yield was at 1.273%, after both traded higher before the release.

Bond yields move inversely to prices.

The minutes suggested the central bank members were in agreement on how the Fed can unwind its $4.5trn balance sheet.

It’s understood the Fed will implement caps on how much it will allow to drop off the balance sheet without reinvestment each month.

There were doubts over how soon such a plan could be implemented, however, with analysts at Rabobank saying: “recent events in Washington DC support our view that the Fed is not going to hike more than twice this year.

"As it is becoming increasingly difficult to make fiscal policy, and Trumpgate is likely to continue to hang over the markets like Damocles’ sword, we do not think that the Fed’s intended third hike will materialise this year.

“Note that this could also delay the Fed’s plan to reduce its reinvestments until next year.”

Overnight, Moody's downgraded China's long-term credit rating by one notch to A1 from Aa3 but also changed its ratings outlook to stable from negative.

West Texas Intermediate crude oil futures were down after the Department of Energy reported a larger than expected decline in US oil stockpiles, with prices last falling 0.51% to $51.21 per barrel.

Existing home sales in the States fell 2.3% on the month in April to reach an annualised rate of 5.57m, against a consensus for 5.7m.

Home prices in the US rose at a 0.6% month-on-month clip in March according to FHFA, as expected.

On the corporate front, stock in Bunge finished up 1.04% on news that Glencore had approached the grain trader about a potential takeover.

Hardware retailer Lowe's tumbled 3% after its first-quarter earnings missed analysts' expectations, but chip maker Nvidia was on the front foot by 1.12% following a report that Japan's SoftBank racked up a $4bn stake in the company.

Jewellery retailer Tiffany was knocked 8.71% lower after reporting a weaker-than-expected 3% drop in global like-for-like sales.

Women's fashion retailer Chico’s FAS dropped 11.27% amid heavy trading volumes after disappointed investors got rid of their shares following the company's first fiscal quarter results and outlook.

Dow Jones - Risers

Goldman Sachs Group Inc. (GS) $223.83 1.91%
Coca-Cola Co. (KO) $45.03 1.44%
E.I. du Pont de Nemours and Co. (DD) $78.37 1.34%
McDonald's Corp. (MCD) $149.51 1.14%
Visa Inc. (V) $94.83 1.01%
Boeing Co. (BA) $185.25 0.96%
Intel Corp. (INTC) $36.12 0.73%
Walt Disney Co. (DIS) $107.71 0.64%
Merck & Co. Inc. (MRK) $64.93 0.59%
Procter & Gamble Co. (PG) $86.50 0.49%