U.S. Stocks Modestly Higher In Cautious Trade

U.S. stocks are modestly higher in late afternoon trades on Wednesday with investors weighing the minutes from the Federal Reserve’s policy meeting in September.

The major averages are all up in positive territory. The Dow is gaining 107.40 points or 0.37 percent 39,346.59. The S&P 500 is up 5.25 points or 0.15 percent at 3,594.09, while the Nasdaq is up 34.87 points or 0.33 percent at 10,461.06.

Data from the Labor Department today showed the Producer Price Index for final demand in the U.S. increased by 0.4% month-over-month in September, rising for the first time in three months. The index had slipped by a revised 0.2% in August. Year-on-year, the PPI jumped 8.5% in September, the data showed.

Investors now await the consumer price inflation data, due on Thursday.

JP Morgan Chase is gaining about 2.3 percent. Coca-Cola, Intel and Goldman Sachs are up 1.3 to 1.7 percent.

Microsoft, Chevron, P&G, Walt Disney, Nike, United Health, American Express and Amgen are up with moderate gains.

Walgreens Boots Alliance, Boeing, Walmart, Merck and Home Depot are down in negative territory, losing 0.6 to 1.1 percent.

The minutes of the Federal Reserve’s policy meeting in September showed members expect interest rates to remain high till prices come down.

The Fed minutes showed that policymakers noted that inflation is especially taking its toll on lower-income Americans.

“Participants judged that the Committee needed to move to, and then maintain, a more restrictive policy stance in order to meet the Committee’s legislative mandate to promote maximum employment and price stability,” the minutes stated.

Officials further noted that with inflation “showing little sign so far of abating … they had raised their assessment of the path of the federal funds rate that would likely be needed to achieve the Committee’s goals.”

“Participants observed that inflation remained unacceptably high and well above the Committee’s longer-run goal of 2 percent,” the minutes said. “Participants commented that recent inflation data generally had come in above expectations and that, correspondingly, inflation was declining more slowly than they had previously been anticipating.”

The members lowered their projections for the economy and expect GDP to grow at just a 0.2 percent annualized pace in 2022 and just 1.2 percent in 2023, well below trend and big drop from 2021, which saw the strongest gains since 1984.

The summary of economic projections at the meeting pointed to a “terminal rate,” or end point of rate increases to be around 4.6 percent.

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