Wall Street's surge is being fueled by federal regulations.
The Fed's interest rate meeting minutes indicate that there's no anticipation of a quicker tempo in loosening monetary policy. In spite of this, U.S. stock indices concluded with gains and are now keeping a close eye on inflation data.
U.S. stock markets saw gains after the Fed's minutes were released. The Dow Jones Industrial Average climbed by 1% to 42,512 points on Wednesday, with the Nasdaq, which focuses on tech, rising by 0.6% to 18,291 points. The S&P 500, which covers a wide range of sectors, increased by 0.7% to a new record close of 5,792 points. Initially, the stock markets had been trading slightly in the red.
The Fed hasn't signaled a faster pace in easing monetary policy with its large interest rate cut, as suggested by the meeting minutes published in the evening. A majority of participants supported the move to begin reducing the rate-cutting cycle, but there was broad agreement that this did not indicate a commitment to a specific rate-cut pace.
The U.S. inflation report for September, set to be released on Thursday, is now a key focus. "Then we have the start of earnings season from Friday, which should bring some volatility to the markets," said Tim Ghriskey, chief strategist at Ingalls & Snyder.
Oil prices dip
Meanwhile, unexpectedly high U.S. crude oil inventory levels led oil prices to drop into negative territory. North Sea Brent crude and U.S. WTI both fell by around 0.5% to $76.80 and $73.34 per barrel respectively. Previously, oil prices had been boosted by up to around 1% due to concerns about Hurricane "Milton" approaching Florida. U.S. crude oil inventories increased by 5.8 million barrels to 422.7 million barrels in the past week, according to the U.S. Energy Information Administration. Analysts had predicted an increase of just 2 million barrels.
Worries about a swift economic recovery in China also impacted sentiment. "Many are now questioning if the announced measures can actually stimulate the economy to such an extent. Others are waiting for more details," said Thomas Altmann, portfolio manager at QC Partners. China's central bank plans to introduce its most extensive stimulus package since the pandemic to boost the world's most populous nation's economy. U.S.-listed shares of Chinese companies such as Alibaba, PDD, and JD.Com fell between 1.6% and 2.3%.
Individual stocks in the spotlight
In individual stocks, lithium producer Arcadian grabbed the attention. Following a 30% surge to $5.55, the stock hit its highest level since the start of the year. British-Australian mining giant Rio Tinto is acquiring the Pennsylvania-based company for $6.7 billion, making it one of the world's largest lithium producers.
On the other hand, Boeing's shares dropped by 3.4%. The aircraft manufacturer has withdrawn its improved offer in a labor dispute with employees and ceased negotiations.
Google's parent company, Alphabet, also saw a 1.5% decline. The U.S. Department of Justice is considering breaking up parts of the internet giant to challenge Google's monopoly. The aim is to divest business segments that helped maintain an illegal monopoly in online search, according to a court document filed on Tuesday.
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Despite the Federal Reserve's indication of no faster pace in easing monetary policy, Wall Street's major indices showed resilience. On Wednesday, the Dow Jones Industrial Average rose by 1% to 42,512 points, while the Nasdaq and S&P 500 also saw gains.
The upcoming U.S. inflation report for September and the start of earnings season will now be closely watched on Wall Street.
[Source: CNBC]
