Wall Street Stocks Rise to Records, US Futures Lower

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Key Takeaways

• S&P500 and the Nasdaq Composite climb to fresh records
• FOMC minutes bring no surprises, investors remain confident recovery is intact

US stocks advanced moderately on Wednesday as investors parsed the Fed’s latest readout, looking for hints to the central bank’s next steps. In general, the FOMC minutes of the last meeting encouraged investors to remain optimistic toward the US economy.

The S&P500 rose 14.59 points, or 0.34%, to close at a record high of 4,358.13. The Nasdaq Composite gyrated near the flatline for most of the session and ended the day higher by 1.42 points or 0.01%. The gain was enough to push the tech-heavy index to a fresh all-time high in its fourth consecutive day of positive performance. The Dow Jones Industrial Average advanced 104.42 points, or 0.30%, to finish the session at 34,681.79.

The minutes released by the Federal Open Market Committee served more as a reiteration of already known details, rather than a pivotal publication that would change the course of the financial markets. Market sentiment remained positive and investors increased their confidence that the economic recovery is robust and moving on an upward trajectory.

At their most recent meeting, Fed officials discussed the looming topic of tapering but also urged for patience and allowing more time for the economy to move forward. According to the meeting summary released Wednesday, several of the 18 committee members indicated concerns that the rapid economic expansion could lead to negative consequences in relation to price increases and a slowdown in job creation.

Inflationary Trend Seen as Transitory

The central bankers, however, remain confident that the current monetary stimulus of $120bn in asset purchases per month should not be reduced for now. Dialing back the pandemic-era stimulus was the most anticipated topic for investors.

On that note, market participants were assuaged there is still “substantial further progress” to be made before the Fed would decide to unwind its supportive easy-money policies. On the inflation issue, Fed policymakers agreed prices have been rising faster than expected, but they viewed this trend as transitory.

Thursday’s stock futures levels indicate a slightly lower open today. Futures tied to the Dow declined around 130 points, while S&P futures and Nasdaq futures were down about 0.25% and 0.15%, respectively.

In overseas stock action, European shares ended Wednesday’s session higher as investors rotated to growth stocks amid increased economic uncertainty related to the Delta strain of Covid-19. The pan-continental Stoxx Europe 600 advanced nearly 0.8% to 459.53. The region-wide index now hovers less than 0.1% from its all-time high in mid-June.

Gold climbed to a session high of $1,810 per troy ounce on Wednesday. Buying momentum later subsided and the precious metal finished the day at $1,803, up 0.4% on the day. Gold logged its sixth day in the green as traders and investors sought a haven in case the Delta variant darkens the optimistic outlook for the global economy.

Bitcoin and other major cryptocurrencies struggled to gain upside momentum but were still able to close the session in the green. The world’s largest digital asset advanced around 3% on Wednesday, while ether gained 2.5%. The cryptocurrency market has been rather weak recently as regulatory pressures from China have dented the positive sentiment. Still, year-to-date, Bitcoin is higher by 13%, while ether is up over 200%.