Stocks rose on Wednesday afternoon following the release of the minutes from the Federal Reserve’s latest policy meeting, which signaled a likely slowdown in the central bank’s pace of rate hikes.
Near 2:05 p.m. ET on Wednesday, the S&P 500 was up 0.6% and the Dow was up 0.3%, both session highs, with the Nasdaq was up 0.9%.
Wednesday marks the week’s final full trading session for U.S. investors. U.S. markets will be closed for Thanksgiving, and markets are open for just a half day on Black Friday.
The biggest move in markets on Wednesday was coming from energy markets, with the price of WTI crude oil down as much as 4.8% to trade as low as $77.10 a barrel. Near 2 p.m. ET, crude oil prices were down closer to 4.3%.
In the Fed minutes, markets reacted to language suggesting a “number of participants” said it would “become appropriate to slow the pace of increase in the target range for the federal funds rate.” Last month, the Fed raised the target range for its benchmark interest rate by 0.75% for the fourth-straight meeting. Markets expect a 0.50% increase in this range at the Fed’s meeting next month.
Elsewhere on the calendar, Wednesday served as a busy day for economic data, with reads on the labor market, housing market, and manufacturing sector all out early Wednesday.
The latest data on weekly jobless claims showed 240,000 new filings for unemployment insurance were made last week, the most since mid-August. Economists expected initial claims to total 225,000 for the week ending November 19.
Durable goods orders for October were also released early Wednesday, showing orders rose 1% last month against expectations for a 0.4% increase, according to data from Bloomberg.
S&P Global’s preliminary read on business activity in November showed a continued slowdown in economic output, with the firm’s manufacturing PMI falling to a 30-month low, while service sector activity hit a three-month low. S&P Global Market Intelligence chief business economist Chris Williamson said Wednesday these reports are consistent with an economy contracting at an annualized rate of 1%.
Consumer sentiment data from the University of Michigan showed consumers remain downbeat about their prospects, with the index falling 5% from October to a reading of 56.8, down from 59.9. “Along with the ongoing impact of inflation, consumer attitudes have also been weighed down by rising borrowing costs, declining asset values, and weakening labor market expectations,” said Joanne Hsu, director of the survey of consumers.
On the housing front, new home sales unexpectedly increased in October, rising 7.5% to an annualized rate of 632,000, much faster than the 570,000 annualized rate expected by economists. Mortgage rates also dipped slightly this week, remaining below recent highs.