U.S. stocks traded mixed Wednesday afternoon, as investors digested minutes from the Federal Reserve’s last policy meeting that reinforced expectations the central bank will begin tapering its $120 billion a month in bond purchases before year-end.
- The Dow closed flat 0.0 or -0..53%
- The S&P 500 rose +13.15 or +0.3%
- The Nasdaq climbed +105.71 or +0.73%
The blue-chip Dow eked out a gain, snapping a three-session skid, after minutes of the Federal Reserve’s September meeting showed the central bank could start tapering its emergency asset purchases as early as November or December, a sign that the U.S. economy has made a significant recovery from the worst shocks of the pandemic.
Several Fed officials said they even preferred a more rapid reduction of the central bank’s current $120 billion pace of monthly purchases of Treasury and agency mortgage-backed securities, rather than the $15 billion reduction being proposed.
But benchmark Treasury yields also were lower, pressuring shares of banks that benefit when yields are higher, while providing a boost to technology shares. The 10-year Treasury note fell to 1.549% as investors were parsing third-quarter U.S. corporate earnings, as concerns about supply-chain problems and labor shortages threaten to dent corporate profits.
Wall Street has been weighing a closely watched reading on inflation that came in hotter than expected.
Data showed that the U.S. consumer-price index rose 0.4% in September after climbing 0.3% in August, the Labor Department said on Wednesday. In the 12 months through September, the CPI increased 5.4% after advancing 5.3% year-over-year in August.
Excluding the volatile food and energy components, the CPI climbed 0.2% after edging up 0.1% in August, the smallest gain in six months. The so-called core CPI rose 4.0% on a year-on-year basis after increasing 4.0% in August.
Higher prices for food, gasoline and rent drove most of the advance. Economists polled by The Wall Street Journal had forecast a 03% increase in the CPI.
Corporations have been increasingly mentioning the impact of pricing pressures on earnings updates and investors have been eagerly listening for guidance from C-suite executives on the outlook for inflation.
- Shares of tech giant Apple AAPL fell 0.4% after Bloomberg reported late Tuesday that the tech giant will cut iPhone 13 production due to global chip supply shortages.
- Shares of Qualcomm Inc. rose 1.7% after the chip maker said its board had authorized $10 billion in share repurchases.
- Shares of Delta Air Lines Inc. skidded 5.8% after the air carrier reported its first adjusted profit since the COVID-19 pandemic, but said the recent rise in fuel prices will pressure its ability to stay profitable in the fourth quarter.
- BlackRock BLK shares climbed 3.8% after the investment giant reported beats on both profit and revenue expectations, and more than 20% growth on assets under management.
- U.S. oil futures lost steam, with the benchmark closing 0.3% to settle at $80.44 a barrel.
- Gold futures closed 2% higher to settle at $1,794.70 an ounce.