We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
U.S. stock markets closed higher on Wednesday after the Fed released its May FOMC minutes. The minutes were mostly in line with market participants’ expectations. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 191.66 points to close at 32,120.28. Notably, 24 components of the 30-stock index ended in positive territory while 6 in negative zone. The tech-heavy Nasdaq Composite finished at 11.434.74, gaining 1.5% or 170.29 points due to the strong performance of large-cap technology stocks.
Meanwhile, the S&P 500 advanced 1% to end at 3,978.73. Nine out of 11 broad sectors of the benchmark index closed in positive zone while two ended in red. The Communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rallied 1.3%, 2.8%, 2.1% and 1.2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 3.7% to 28.37. A total of 11.19 billion shares were traded Wednesday, lower than the last 20-session average of 13.27 billion. Advancers outnumbered decliners on the NYSE by a 3.56-to-1 ratio. On Nasdaq, a 2.22-to-1 ratio favored advancing issues.
Fed’s FOMC Minutes
The Fed released the minutes of its latest FOMC held on May 3-4. The minutes were mostly in line with market’s expectations. The FOMC said, “Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings.” The minutes also said, “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”
This came as a relief to market participants as it clearly shows the flexibility on the part of policy makers. The central thinks that the fundamentals of the U.S. economy is strong. Therefore, tight monetary policies to some extents are not to push the economy in recession.
The Fed has already hiked the benchmark lending rate by 75 basis points and has given a clear indication of two more rate hikes of 50 basis points each in June and July. The central bank terminated the $120 billion monthly quantitative easing program in March and will start shrinking its $9 trillion balance sheet from June. On May 12, Fed Chair Jerome Powell admitted that he cannot give any guarantee for a soft landing of the economy under a higher interest rate regime.
The yield on the benchmark 10-Year U.S. Treasury Note fell to 2.75% from 3.23% at the beginning of this month. Investors are gradually dumping risky assets like equities and opting for safe-haven government bonds. As a result, bond prices and increasing resulting in falling yields.
Economic Data
The Department of Commerce reported that the durable goods orders in April increased 0.4% compared with the consensus estimate of 0.7%. The data of March was revised downward to 0.6% from 0.8% reported earlier.
Non-defense capital goods orders excluding aircraft – also known as core durable goods orders – rose 0.3% in April compared with the consensus estimate of $0.5%. This metric serves as a closely watched proxy for business investment. Year over year, core durable orders climbed 7.3%. The non-defense capital goods shipments rose by a better-than-expected 0.8% last month. This metric is used for calculating U.S. GDP.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Stock Market News for May 26, 2022
U.S. stock markets closed higher on Wednesday after the Fed released its May FOMC minutes. The minutes were mostly in line with market participants’ expectations. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 191.66 points to close at 32,120.28. Notably, 24 components of the 30-stock index ended in positive territory while 6 in negative zone. The tech-heavy Nasdaq Composite finished at 11.434.74, gaining 1.5% or 170.29 points due to the strong performance of large-cap technology stocks.
Meanwhile, the S&P 500 advanced 1% to end at 3,978.73. Nine out of 11 broad sectors of the benchmark index closed in positive zone while two ended in red. The Communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rallied 1.3%, 2.8%, 2.1% and 1.2%, respectively.
The major gainer of the S&P 500 Index was Best Buy Co. Inc. (BBY - Free Report) , which jumped 9%. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 3.7% to 28.37. A total of 11.19 billion shares were traded Wednesday, lower than the last 20-session average of 13.27 billion. Advancers outnumbered decliners on the NYSE by a 3.56-to-1 ratio. On Nasdaq, a 2.22-to-1 ratio favored advancing issues.
Fed’s FOMC Minutes
The Fed released the minutes of its latest FOMC held on May 3-4. The minutes were mostly in line with market’s expectations. The FOMC said, “Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings.” The minutes also said, “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”
This came as a relief to market participants as it clearly shows the flexibility on the part of policy makers. The central thinks that the fundamentals of the U.S. economy is strong. Therefore, tight monetary policies to some extents are not to push the economy in recession.
The Fed has already hiked the benchmark lending rate by 75 basis points and has given a clear indication of two more rate hikes of 50 basis points each in June and July. The central bank terminated the $120 billion monthly quantitative easing program in March and will start shrinking its $9 trillion balance sheet from June. On May 12, Fed Chair Jerome Powell admitted that he cannot give any guarantee for a soft landing of the economy under a higher interest rate regime.
The yield on the benchmark 10-Year U.S. Treasury Note fell to 2.75% from 3.23% at the beginning of this month. Investors are gradually dumping risky assets like equities and opting for safe-haven government bonds. As a result, bond prices and increasing resulting in falling yields.
Economic Data
The Department of Commerce reported that the durable goods orders in April increased 0.4% compared with the consensus estimate of 0.7%. The data of March was revised downward to 0.6% from 0.8% reported earlier.
Non-defense capital goods orders excluding aircraft – also known as core durable goods orders – rose 0.3% in April compared with the consensus estimate of $0.5%. This metric serves as a closely watched proxy for business investment. Year over year, core durable orders climbed 7.3%. The non-defense capital goods shipments rose by a better-than-expected 0.8% last month. This metric is used for calculating U.S. GDP.