Shares rose Wednesday after minutes of the Federal Reserve’s latest policy meeting eased the prospect of the central bank’s interest rate hike next month.
When the closing bell rang on Wall Street, all three major indices were in the green, with the S&P 500 up 0.6%, the Dow up 0.3% and the Nasdaq up 1%.
Wednesday was the last full trading session of the week for US investors. The US markets are closed for Thanksgiving and on Black Friday the markets are only open for half a day.
The biggest movement in markets on Wednesday came from energy markets, where WTI crude fell 4.3% to $77.47 a barrel. The price of crude oil fell to $77.10 during the day, which is close to a one-year low.
Markets responded Wednesday afternoon to a “number of participants” suggesting in Fed parlance, “it will become appropriate to slow the pace of hikes to the target range for the federal funds rate.”
Last month, for the fourth consecutive meeting, the Fed raised the target range for its benchmark interest rate to 0.75%. Markets expect a 0.50% increase in this range next month at the Fed’s meeting.
Elsewhere in the calendar, Wednesday was a busy day for economic data, with early Wednesday readings covering the labor market, housing market and manufacturing sector.
The latest weekly jobless claims data showed 240,000 new claims for unemployment insurance last week, the highest number since mid-August. Economists had expected a total of 225,000 claims for the week ending Nov. 19.
Durable goods orders for October were also released on Wednesday, with orders rising 1% compared to expectations for a 0.4% increase last month, according to data from Bloomberg.
S&P Global showed a continued slowdown in economic output in November in a preliminary survey of business activity, with the manufacturing PMI falling to a 30-month low, while activity in the services sector hit a three-month low . These reports are consistent with the economy contracting at a 1% annual rate, Chris Williamson, chief business economist at S&P Global Market Intelligence, said Wednesday.
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Consumer confidence data from the University of Michigan showed consumers remain optimistic about their outlook, with the index falling 5% from October 59.9 to 56.8. “Consumer attitudes have also been affected by the lingering impact of inflation, as well as rising borrowing costs, falling real estate values and weakening job market expectations,” said Joanne Soo, director of consumer research.
On the housing front, new home sales rose unexpectedly in October, rising 7.5% to an annual figure of 632,000, much faster than the 570,000 annual figures economists had expected. Mortgage rates also fell slightly this week, lower than recent highs.
Recent equity momentum continues
The S&P 500 closed above 4,000 for the first time in two months on Tuesday and the Dow closed at a three-month high on Wednesday, as investors built on that positive momentum.
Over the past month, the Dow is up nearly 10%, while the S&P 500 is up more than 6.5%. The tech-heavy Nasdaq is lagging, up less than 3% over the period as higher rates and the collapse of crypto markets weigh on the broader tech industry.
Still, towards the end of the year, some strategists have reacted more optimistically to the recent market action, even as high-profile teams from Morgan Stanley and Goldman Sachs took a more cautious look at the stock market this week. have been issued.
“The market is like a coiled spring,” said Brian Belsky, chief investment strategist at BMO Capital Markets. told Yahoo Finance Live on Tuesday, “I think the market will continue to … climb higher. I actually think there’s a good chance we’ll go above 4,000.” [on the S&P 500] at the end of the year.”
Belski has a year-end price target on the S&P 500 of 4,300, meaning the index could be up 8% or more by the end of the year.
In crypto markets, the fallout from FTX’s collapse continues to rip through the industry, even though bitcoin price was trading near $16,500 on Wednesday, a few percentage points higher. Late Wednesday afternoon, disgraced FTX founder and former CEO Sam Bankman-Fried told He will appear next Wednesday at the New York Times DealBook conference, his first public appearance since the company filed for bankruptcy earlier this month.
On Tuesday, Digital Currency Group, the parent company of troubled exchange Genesis Global, became the latest major crypto player to come out and reassure investors that a bankruptcy filing was not imminent.
In a memo to DCG employees, CEO Barry Silbert said last week’s decision to halt redemptions and new business on Origin was due to a “liquidity and maturity mismatch in the Origin loan book.”
Silbert revealed that intercompany loans were made between DCG and Genesis, but argued that these loans were made “at the same time as hundreds of crypto investment firms”.
On the revenue side, Wednesday morning results from Deere & Co. (DE) shares 5% higher, with the agriculture giant reporting earnings that beat expectations.
John Deere tractors are seen in a tractor race called ‘Tractorija’ held as part of the traditional Dozhinki Harvest Festival. Giraltowicz, Wadowice province in Poland on August 28, 2022. (Photo by Nurfoto via Beata Zwarzel/Getty Images)
Other movers early Wednesday included names reporting results after Tuesday’s market close, including HP (HPQ), Nordstrom (JWN) and Autodesk (ADSK).
HP shares rose 1.8% on Wednesday after the company announced plans to cut its workforce by 12% or 6,000 jobs by the end of fiscal year 2025 in response to a slump in the PC market.
Nordstrom shares fell 4% on Wednesday after reporting a decline in sales in its most recent quarter and forecasting lower full-year earnings.
Autodesk shares fell more than 5.5% after the company lowered its billing and cash flow outlook this year due to “lower demand for multi-year contracts, upfront and higher than we expected for annual contracts” citing a reference.
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