NEW YORK, May 25 (Reuters) – Wall Street ended higher on Wednesday after the release of minutes from the last meeting of the Federal Reserve for monetary policy, which showed that politicians unanimously believe that the US economy is very strong as they struggle to control of inflation without causing a recession. .
The minutes of the May meeting of the Federal Open Market Committee, which ended with a 50 basis point increase in the Fed’s target interest rate – the biggest jump in 22 years – showed that most committee members believe that further increases in the Fed’s interest rate interest rates “will probably be appropriate” at the upcoming meetings in June and July. Read more
“Equality 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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“Until the Fed arrives in September, they will have a lot of economic data to make their transition from there so that they can continue to support the option,” Mayfield added.
All three major U.S. stock indexes were spinning earlier in the day amid growing concerns over business and consumer surveys, economic data and corporate earnings reports suggesting a cooling of the U.S. economy – even as the Fed prepares to throw bucket of cold water on it to cope with decades -high inflation.
Concerns that the Fed’s overly aggressive interest rate hike could drive the economy into recession, despite evidence that inflation peaked in March, have fueled those fears.
“There is some credibility in the idea that inflation works (for the Fed) for them,” Mayfield said. “There is already a cooling off and financial conditions have tightened in the last month due to the strength of the dollar and the weakness of the stock market.”
A man walks past the New York Stock Exchange (NYSE) in Manhattan, New York, USA, May 19, 2022. REUTERS / Andrew Kelly
On Thursday, the Commerce Department is due to release its second first-quarter GDP survey, which analysts expect to slow a slightly shallower contraction than the 1.4% quarterly decline on an annual basis initially reported.
The Personal Consumer Expenditure Report (PCE) will follow on Friday, which will provide additional evidence on consumer spending and whether inflation peaked in March, as other indicators suggest.
According to preliminary data, the S&P 500 (.SPX) rose 38.55 points, or 0.94%, to finish at 3980.03 points, while the Nasdaq Composite (.IXIC) rose 166.41 points, or 1.48%, up 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 retailer Amazon.com (AMZN.O) secured the strongest boost for the S&P 500 and Nasdaq.
Chip maker Nvidia Corp (NVDA.O) advanced ahead of its first-quarter results after the bell.
The department store operator Nordstrom Inc (JWN.N) has risen after its optimistic annual profit and revenue forecasts. Read more
Fast food chain Wendy’s Co. (WEN.O) has jumped after a regulatory statement revealed that shareholder Nelson Peltz is considering a potential takeover bid for the company. Read more
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Report by Stephen Culp; additional reports by Anisha Sircar and Devik Jain in Bengaluru; edited by Jonathan Oatis
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