Wall Street moves lower after release of Fed minutes

VIDEO: REUTERS
Traders working on the floor of the New York Stock Exchange.
Traders working on the floor of the New York Stock Exchange.PHOTO: REUTERS

NEW YORK (REUTERS) - US stocks added to losses on Wednesday (April 11) after the release of minutes from the Federal Open Market Committee showed some concern that rising inflation might require a faster pace of interest rate hikes than anticipated.

Members of the Federal Reserve voted unanimously to raise borrowing costs by a quarter percentage point and expressed confidence that the economy would strengthen and inflation would rise in coming months.

After the FOMC minutes were released, all three major Wall Street indexes moved lower, indicating investor concerns about rising interest rates.

"The minutes were modestly negative," said John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston.

"People had been speculating that due to all the turbulence in the market because of geopolitical uncertainties that the Fed might consider pausing or slowing down the interest rate increases."

Earlier in the day, political headlines had weighed on US stocks.

US President Donald Trump warned Russia of imminent military action in Syria, declaring missiles "will be coming."

The rising tensions sent oil prices surging, boosting energy stocks nearly 1 per cent. But the risk-off sentiment weighed on Treasury yields, pushing financial stocks down 1.4 per cent.

The Dow Jones Industrial Average fell 231.41 points, or 0.95 per cent, to 24,176.59, the S&P 500 lost 15.01 points, or 0.56 per cent, to 2,641.86 and the Nasdaq Composite dropped 26.41 points, or 0.37 per cent, to 7,067.90.

 

Facebook shares added the most to the S&P, gaining 1.2 per cent as chief executive Mark Zuckerberg testified before Congress for a second day.

The shares were down about 0.5 per cent at the start of Zuckerberg's testimony, but they reversed course as he pushed back on Congress members' suggestions that users do not have enough control of their data.

Industrial distributor Fastenal fell 6.4 per cent after its earnings missed expectations. The stock was the biggest decliner on the S&P, followed by peer WW Grainger's 4.2 per cent drop.

Declining issues outnumbered advancing ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favoured decliners.

The S&P 500 posted 6 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 43 new highs and 23 new lows.