© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023. REUTERS/Brendan McDermid/File Photo
By Sinéad Carew and Shashwat Chauhan
(Reuters) – Wall Street’s major indexes closed higher after Wednesday’s choppy session with the release of minutes from the U.S. Federal Reserve’s last meeting showing caution among policy makers that helped fuel investor hopes that rates would stay steady.
The Fed pointed to uncertainties around the economy, oil prices and financial markets as supporting “the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate,” according to the minutes released on Wednesday from the Sept. 19-20 meeting.
Trading was choppy on Wednesday with all the indexes starting off the session with gains before turning lower ahead of the minutes and then regaining lost ground.
Along with recent moves in interest rates and dovish comments from Fed officials in the last few days, Angelo Kourkafas, senior investment strategist at Edward Jones, said the minutes appeared encouraging for investors.
“Today’s release highlights the risk of over-tightening, and knowing what has happened over the past three weeks with interest rates, that provides some comfort to investors that we’re not going to see another rate hike,” said Kourkafas.
But he noted that the Fed’s next decisions will take into account consumer price reading for September, due out on Thursday as the Fed’s “data dependence hasn’t gone away.”
Earlier on Wednesday, data showed that U.S. producer prices increased more than expected in September amid higher costs for energy products, but underlying inflation pressures at the factory gate continued to moderate.
According to preliminary data, the S&P 500 gained 18.56 points, or 0.43%, to end at 4,376.80 points, while the Nasdaq Composite gained 96.83 points, or 0.71%, to 13,659.68. The Dow Jones Industrial Average rose 57.27 points, or 0.17%, to 33,796.57.
The energy index was dragged down during the session due to a slump in Exxon Mobil (NYSE:) shares after the oil and gas producer agreed to buy rival Pioneer Natural Resources (NYSE:) in an all-stock deal valued at $59.5 billion.
Earlier, Fed Governor Michelle Bowman repeated her view that the U.S. central bank will probably need to tighten monetary policy further, while Fed Governor Christopher Waller said the central bank is in a position to watch and see what happens with interest rates.
Yields on benchmark 10-year notes earlier on Wednesday falling to a roughly two-week low as investors flocked to safe haven bets as a war in the Middle East raged after a deadly weekend attack by Hamas on Israel killed hundreds.
Israel continued to pound Gaza with retaliatory air strikes, killing hundreds of Palestinians, including women and children. Israel formed an emergency unity government on Wednesday and its army said it killed three Hamas militants.