Stocks Rise and Dollar Falls Amid Fed, CEO Rebuke: Markets Wrap

Updated on
  • Trump business councils to disband amid Virginia controversy
  • Fed minutes show officials concerned about low inflation

Federal Reserve officials engaged in a detailed debate about inflation while keeping the door open for a September announcement on the timing of balance-sheet reductions, according to minutes from their policy meeting in July. Bloomberg's Christopher Condon reports on 'Bloomberg Markets.' (Source: Bloomberg)

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U.S. stocks ended higher, the dollar fell and Treasuries advanced Wednesday as Federal Reserve meeting minutes showed that officials are concerned about inflation remaining persistently low.

In the minutes from the July meeting, a majority of officials stuck with a forecast that inflation would gradually rise to a 2 percent target over the medium term. However, “many” saw some “likelihood” that it would remain below that level for longer than expected. The minutes didn’t specify when the Fed would begin shrinking its balance sheet this year.

The minutes rekindled debate on the timing for future policy moves, including when the central bank will begin winding down its balance sheet, as economic data continue to paint a mixed picture on the strength of the American economy.

The release interrupted another market session dominated by news relating to President Donald Trump, this time because he disbanded two business advisory councils after a growing number of corporate executives quit in response to his comments about the violence in Virginia last weekend. The moves sparked speculation that the president’s embattled policy agenda may face higher hurdles amid flagging support among business leaders.

Markets had been settling down after a tumultuous few days spurred by heightened tensions between the U.S. and North Korea. In addition, retail sales data released Tuesday showed that American consumers splurged in July, bolstering the prospects of accelerating growth in the second half.

Elsewhere, Australian wage growth matched estimates in the second quarter, rising 0.5 percent from the previous three-month period and 1.9 percent from a year earlier.

Terminal subscribers can read more on our Markets Live blog.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index finished up 0.1 percent at 2,468.11, down from its session high.
  • The Dow Jones Industrial Average rose 0.1 percent to 22,024.46, the Nasdaq Composite Index gained 0.2 percent and the small-cap Russell 2000 Index was essentially unchanged.
  • The Stoxx Europe 600 Index added 0.7 percent to 379.09, the highest in a week. 
  • The MSCI All-Country World Index increased 0.5 percent. 
  • The U.K.’s FTSE 100 Index surged 0.7 percent. 
  • Germany’s DAX Index jumped 0.7 percent to the highest in more than a week. 

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4 percent.
  • The euro gained 0.3 percent to $1.177. 
  • The Japanese yen rose 0.4 percent to 110.19 per dollar.

Bonds

  • The yield on 10-year Treasuries fell four basis points to 2.2342 percent. 
  • Germany’s 10-year yield increased one basis point to 0.45 percent, the highest in more than a week. 
  • Britain’s 10-year yield gained two basis points to 1.105 percent, the highest in a week.

Commodities

  • West Texas Intermediate crude fell 1.7 percent to $46.75 a barrel. 
  • Gold rose 0.9 percent to $1,282.31 an ounce following two days of losses.
  • Copper added 2.9 percent to $2.966 a pound and zinc gained 5.4 percent to $3,119 a ton as base metals rallied.

Asia

  • Japan’s Topix index closed little changed. South Korea’s Kospi index rose 0.6 percent, reopening after a holiday. The Hang Seng Index added 0.9 percent in Hong Kong, while the Shanghai Composite Index fell 0.2 percent.
  • Australia’s S&P/ASX 200 Index advanced 0.5 percent. Singapore’s Straits Times Index was Asia’s worst performer on Wednesday, falling as much as 1.1 percent, as banks and interest-rate sensitive stocks dropped.

— With assistance by Adam Haigh, and Robert Brand

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