NEW YORK: US stocks sharply pared losses in afternoon trading on Wednesday after minutes from the Federal Reserve’s July meeting showed officials said the pace of future interest rates hikes would depend on incoming data.
Major indexes had been solidly lower ahead of the release of the minutes, with growth shares coming under pressure after bond yields climbed and as weak results from Target weighed on retailers.
The minutes also showed that participants at the session said it may take longer than anticipated for inflation to dissipate.
The Fed has lifted its benchmark overnight interest rate by 225 points this year, and the central bank is widely expected to hike rates next month by either 50 or 75 basis points.
“They stayed hawkish, but they also opened the door perhaps for a half of a percentage point hike in September as opposed to 75,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“I believe the market liked what they said,” he said. “The market has rallied from the low end of the trading range today.” The Dow Jones Industrial Average fell 29.3 points, or 0.09%, to 34,122.71, the S&P 500 lost 9.41 points, or 0.22%, to 4,295.79 and the Nasdaq Composite dropped 75.67 points, or 0.58%, to 13,026.88.
The energy sector was higher in afternoon trading, along with staples and real estate, while the rest of the major S&P 500 sectors were lower.
After a brutal first-half of the year, stocks are up since the start of July. Upbeat corporate earnings have helped fuel a rebound.
Declining issues outnumbered advancing ones on the NYSE by a 3.36-to-1 ratio; on Nasdaq, a 2.58-to-1 ratio favored decliners.
The S&P 500 posted 4 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 30 new highs and 50 new lows.
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