Wall Street rally as the Fed’s minutes live up to expectations

  • Fed minutes: “possible” future interest rate hikes of 50 bp
  • Nordstrom goes up after the increase in potential profits
  • Nvidia’s second-quarter revenue forecast is lower than expected
  • Upward indicators: Dow 0.60%, S&P 0.95%, Nasdaq 1.51%

NEW YORK, May 25 (Reuters) – Wall Street closed higher on Wednesday, strengthened just minutes after the last Fed meeting on monetary policy showed that policymakers were unanimous that the US economy was very strong. strong as they faced the reduction of inflation without causing recession.

Minutes from the Federal Open Market Committee meeting in May, which resulted in a 50 basis point increase in the Fed’s target interest rate – the biggest jump in 22 years – showed that most committee members considered further such increases. interest rates “would probably be appropriate” at the forthcoming June and July meetings. read more

“The uniformity of views is good,” 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.”

Sign up now for FREE unlimited access to Reuters.com

“Until (the Fed) arrives in September, they will have a lot of financial data to make the move from there, so they will continue to have the option,” Mayfield added.

All three major US stock markets moved earlier in the day amid growing business and consumer concerns, financial data and corporate earnings reports suggesting a cool US economy – even as the Fed prepares to drop a bucket of cold water to face decades – high inflation.

Fears that excessively aggressive interest rate hikes by the Fed could lead the economy into recession, despite evidence that inflation peaked in March, fueled those concerns.

“There is some credibility to the idea that inflation does the (Fed) job for them,” Mayfield said. “There is already a chill and economic conditions have tightened in the last month due to the strength of the dollar and the weakness of the stock market.”

On Thursday, the Commerce Department is set to announce its second-quarter GDP decline, which analysts expect to slow down a slightly shallower contraction from the 1.4% quarterly annual decline initially reported.

The Personal Consumer Expenditure (PCE) report will follow on Friday, which will provide further indications on consumer spending and whether inflation peaked in March, as other indicators suggest.

A man walks next to the New York Stock Exchange (NYSE) in Manhattan, New York, USA, May 19, 2022. REUTERS / Andrew Kelly

The Dow Jones Industrial Average (.DJI) gained 191.66 points, or 0.6%, to 32,120.28, the S&P 500 (.SPX) gained 37.25 points or 0.95%, to 3,978.73 and Nasdaq.IX0) added 1 unit (7 units). 1.51%, to 11,434.74.

Nine of the 11 major divisions of the S&P 500 rose, with shares of Consumer Discretion (.SPLRCD) leading the way with gains of 2.8%.

Amazon.com Inc. (AMZN.O) and Tesla Inc (TSLA.O) provided the strongest growth in the S&P 500 and Nasdaq, up 2.6% and 4.9%, respectively.

Department store Nordstrom Inc (JWN.N) rose 14.0% after its optimistic annual earnings and revenue forecast. read more

Wendy’s Co fast food chain (WEN.O) jumped 9.8% after a regulatory deposit revealed that shareholder Nelson Peltz was considering a possible takeover bid for the company. read more

Shares of Nvidia Corp (NVDA.O) fell more than 8% in after-hours trading, as forecasts for the second quarter of the company fell short of expectations. read more

Evolving issues outperformed the NYSE by 3.56 to 1. On the Nasdaq, a 2.22 to 1 ratio favored the advanced.

The S&P 500 hit three new 52-week highs and 32 new lows. the Nasdaq Composite recorded 23 new highs and 255 new lows.

The volume on the US stock exchanges was 11.19 billion shares, compared to the average of 13.27 billion shares for the full session in the last 20 trading days.

(History repositioned to change “estimates” to “expectations” in Nvidia’s third dot title)

Sign up now for FREE unlimited access to Reuters.com

Report by Stephen Culp. additional reports by Anisha Sircar and Devik Jain in Bengaluru. curated by Jonathan Oatis

Our role models: The Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.