NEW YORK (awp international) – After two turbulent trading days, some confidence has returned to the US stock market. The most important indices closed on Wednesday, some quite clearly in the black. At least the minutes of the US Federal Reserve Bank’s most recent meeting of the Monetary Policy Committee did not give rise to expectations that the Fed would take a tougher stance than expected in order to combat high inflation. On the contrary, stock market traders saw indications that the central bank could take a slightly less strict course towards the end of the year after an initial phase of larger rate hikes.
The leading index Dow Jones Industrial went 0.60 percent higher at 32,120.28 points from trading. The market-wide S&P 500 went up 0.95 percent to 3978.73 points. The tech-heavy Nasdaq 100 rose 1.48 percent to 11,943.93 points.
As expected, the Fed initially announced further major interest rate hikes in its minutes. However, the speedy reduction in monetary policy support for the economy should allow the central bank to reassess its monetary policy by the end of the year. Paul Ashworth, chief economist for the USA at the analysis house Capital Economics, interpreted this as a statement that speaks for a rather less strict monetary policy after this phase of larger interest rate hikes. The statement is reminiscent of Federal Reserve Banker Raphael Bostic’s recent comment that a pause in interest rate hikes in September “might make sense.”
Meanwhile, nervousness on the market remains high. On Monday, signs of easing in the trade dispute with China and a strong banking sector had driven prices up, but on Tuesday bad news from the social media industry once again triggered a price slide in technology stocks. The war in Ukraine and the corona lockdowns in China are further worsening the prospects, especially for tech stocks, which are very dependent on the economy.
Among individual stocks, fast-food restaurant chain Wendy’s was up 9.8 percent. Major shareholder Trian Fund Management “checks a transaction”. That could mean a takeover, merger or other transaction, it said. Trian holds an approximately 11.8 percent stake in Wendy’s.
Nordstrom was up about 14 percent. The department store and mail order chain had raised its sales and earnings expectations for 2022. In the wake, the shares of industry colleague Best Buy at the top of the S&P 500 soared by almost 9 percent.
Another topic on the stock exchange was the massacre at an elementary school in the state of Texas. The US President called for consequences from the recurring rampages with guns. “As a nation, we have to ask ourselves when in God’s name are we going to stand up to the gun lobby,” said Joe Biden. “We have to take action.”
But as is so often the case with similarly bad events, this time too the prices of arms manufacturers’ shares rose. Smith & Wessen Brands and Vista Outdoor each rose by almost seven percent. Stockbrokers justify this by saying that those who now expected a sharper pace of politics wanted to stock up on weapons in good time.
The euro was last listed at 1.0674 US dollars. The European Central Bank set the reference rate at 1.0656 (Tuesday: 1.0720) dollars. The dollar thus cost 0.9384 (0.9328) euros.
On the bond market, the futures contract for ten-year Treasuries (T-Note Future) rose by 0.16 percent to 120.56 points. In return, the yield on ten-year government bonds fell to 2.76 percent./la/he
— By Lutz Alexander, dpa-AFX —
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