Stocks Edge Higher Ahead of Fed Minutes
U.S. stocks edged up ahead of the release of minutes from the Federal Reserve’s most recent policy meeting, which will be combed for details on the path of coming interest-rate rises.
After briefly opening lower, stock indexes turned green in early trading. The S&P 500 rose 0.3% after the broad-market index closed down 0.8% on Tuesday. The Nasdaq Composite Index rose 0.4%, a reversal from a sharp selloff in tech stocks the day before. The Dow Jones Industrial Average edged up 0.1%, or 26 points.
Stocks have had a volatile start to the week, buffeted by concerns about the Federal Reserve tightening monetary policy to combat the bout of high inflation and how sharp of a slowdown in growth it could cause. The S&P 500 is down nearly 18% from its last record high in January and briefly fell into bear-market territory last Friday before paring losses.
“It’s been really volatile, to say the least. This is linked to the question of recession, whether that’s coming or not. That’s effectively what the market has been pushing and pulling between,” said Fahad Kamal, chief investment officer at Kleinwort Hambros.
Minutes from the Federal Reserve meeting earlier this month will be out at 2 p.m. ET and are expected to provide more signals for investors about the outlooks of policy makers on the economy and inflation. U.S. durable goods orders for April increased by 0.4%, a slower pace than economists expected.
The yield on the benchmark 10-year Treasury note was down to 2.73% from 2.758% on Tuesday. It has declined for four of the past five trading sessions. Yields fall when prices rise.
“The market is pricing the slowdown that will eventually come from the Fed tightening. It also forecasts that inflation in 2023 will slow to much more reasonable levels,” said Antonio Cavarero, head of investments at Generali Insurance Asset Management.
Government debt tends to perform well during times of slower economic growth, which has led to a stabilization in the bond market in recent days.
Oil prices climbed with global benchmark Brent crude rising 0.6% to trade at $111.40 a barrel. The U.S. energy secretary said the Biden administration hasn’t ruled out a ban on oil exports to tame domestic fuel prices, Reuters reported.
In individual stocks,
shares added 2%. The Snapchat maker’s stock plunged 43% on Tuesday after it issued a profit warning, citing macroeconomic conditions that have deteriorated faster and further than expected.
“Clearly there’s been a revaluation of tech valuations. It’s impossible to know how far it goes, but some of these are quality businesses and significantly cheaper than they have been trading recently,” Mr. Kamal said. “If you’re a long-term investor, that’s going to be something of interest.”
Retailer Nordstrom climbed 2.4% after raising its guidance for full-year revenue growth. Home builder
rose 0.3% after reporting revenue and profit that beat analysts’ expectations. Apparel company
jumped 11% after posting a narrower-than-expected loss and raising sales guidance.
are scheduled to report earnings on Wednesday.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.3%. British online grocer
fell 5.2% after cutting sales guidance for a joint venture due to rising prices changing consumer behavior.
In Asia, major benchmarks were mixed. The Shanghai Composite Index added 1.2% while Hong Kong’s Hang Seng ticked up 0.3%. Japan’s Nikkei 225 declined 0.3%.
Write to Anna Hirtenstein at email@example.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8