US stocks shrug off Fed minutes to break losing streak

NEW YORK - Wall Street stocks closed higher on Wednesday, snapping a brief losing streak as markets shrugged off messaging from the Federal Reserve’s most recent meeting that stressed its commitment to lowering inflation.

Fed policymakers do not expect it will be “appropriate” to start cutting interest rates this year, generally believing a restrictive stance is needed until there are clear signs that consumer prices are coming down, minutes from the December meeting showed.

But this did not stop the Dow Jones Industrial Average from closing 0.4 per cent higher at 33,269.77.

The tech-rich Nasdaq Composite Index bounced 0.7 per cent to 10,458.76, while the broad-based S&P 500 rose 0.8 per cent to 3,852.97.

The movements came on the back of survey data showing that US manufacturing activity remained in contraction for a second straight month, a sign that earlier Fed rate hikes may be biting.

Faced with decades-high inflation, the Fed raised interest rates seven times last year in hopes of cooling the world’s biggest economy.

While interest-sensitive sectors are reeling, job openings data also released on Wednesday continued showing minimal signs of labour market weakness.

But the job openings and labor turnover reports are often subject to revisions, and “openings are clearly trending down,” noted Mr Mickey Levy, of Berenberg Capital Markets.

“(They) are likely to fall more rapidly as economic conditions deteriorate in 2023,” he said.

As they digest the figures, investors appear to be awaiting further data, including a key employment report due on Friday, for more clues on the policy direction to come. AFP