By Joy Wiltermuth and Mark DeCambre
U.S. stocks finished mostly higher Wednesday, after minutes from the Federal Reserve’s last policy meeting reinforced expectations the central bank will begin tapering its $120 billion a month in bond purchases before year-end.
How did stock indexes perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.55% fell less than a point to finish flat at 34,377.81, but extending its losing streak to a fourth straight day.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +2.22% rose 13.15 points, or 0.3%, to end at 4,363.80.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +3.02% climbed 105.71 points, or 0.7%, closing at 14,571.64.
On Tuesday , all three major indexes fell, extending a losing streak to a third session.
What drove the market?
The blue-chip Dow eked out a gain, snapping a three-session skid, after minutes of the Federal Reserve’s September meeting showed the central bank could start tapering its emergency asset purchases as early as November or December , a sign that the U.S. economy has made a significant recovery from the worst shocks of the pandemic.
Several Fed officials said they even preferred a more rapid reduction of the central bank’s current $120 billion pace of monthly purchases of Treasury and agency mortgage-backed securities, rather than the $15 billion reduction being proposed.
But benchmark Treasury yields also were lower, pressuring shares of banks that benefit when yields are higher, while providing a boost to technology shares. The 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.18% fell to 1.549% as investors were parsing third-quarter U.S. corporate earnings, as concerns about supply-chain problems and labor shortages threaten to dent corporate profits.
“This is the start of a pivotal time for the next couple of weeks, as we start to get a look into what corporations have experienced and what they are anticipating they will experience over the next six months,” Wayne Wicker, chief investment officer at MissionSquare Retirement, said in a phone interview.
“That’s why you see people waffling right now. You have mixed messages on whether the economy has seen peak earnings and if inflation will eat away at margins and earnings decline,” he said.
“Stock selection is going to be a more important ingredient in the fourth quarter, because not everything is going to go straight up.”
Wall Street has been weighing a closely watched reading on inflation that came in hotter than expected.
Data showed that the U.S. consumer-price index rose 0.4% in September after climbing 0.3% in August, the Labor Department said on Wednesday. In the 12 months through September, the CPI increased 5.4% after advancing 5.3% year-over-year in August.
Excluding the volatile food and energy components, the CPI climbed 0.2% after edging up 0.1% in August, the smallest gain in six months. The so-called core CPI rose 4.0% on a year-on-year basis after increasing 4.0% in August.
Higher prices for food, gasoline and rent drove most of the advance. Economists polled by The Wall Street Journal had forecast a 03% increase in the CPI.