United States stocks reversed losses to finish slightly higher Wednesday after the minutes of the July Federal Reserve meetings showed divisions among policymakers about the pace and timing of future rate increases.
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Investors took those comments “to mean that they’re on the hawkish side, ” said Ira Epstein, a strategist with Linn, adding that the prospect of higher rates lifts the dollar.
On Tuesday, New York Fed President William Dudley said a rate hike could come next month.
While a couple of the FOMC members wanted to wait for more evidence showing inflation would reach the Fed’s target of 2 percent, one member wanted to raise interest rate at the July meeting.
Futures for the Standard & Poor’s 500 index ticked 0.03% lower to trade at 2,179.20 points ahead of the market open.
According to minutes from its July meeting, Fed officials hinted that USA economic conditions may soon be strong enough to support a rate hike, noting that an increase “was or would soon be warranted”.
But a slowdown in global economy since the start of the year and other global financial risks, including Britain’s referendum vote to leave the European Union in June, has made Fed policymakers cautious to hold off on any further rate hikes.
NY markets were slightly positive, with the Dow Jones industrial average ahead 21.92 points to 18,573.94, while the broader S&P 500 gained 4.07 points to 2,182.22.
On Thursday, the dollar also fell against most higher-yielding, but riskier, emerging market units. The CME Group’s FedWatch Tool indicates traders are pricing in a 82% probability the target will remain at 0.25% to 0.5% as of September 21, down just slightly from the 85% odds on Tuesday.
The policymaker said earlier this week the Fed could possibly raise rates in September. The index earlier touched a near eight-week low of 94.324.
Later in the day, three Fed officials – William Dudley, Robert Kaplan and John Williams – are scheduled to speak. No major economic data is expected on Wednesday.
Cisco fell 1.3% after technology news site CRN reported the company is laying off employees. However, its quarterly revenue and profit topped analysts’ estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored decliners.
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Malaysia’s ringgit also rallied after Brent crude jumped on Wednesday, helping support the nation that relies on energy exports and underpinning gains in an index of emerging-market shares.
