Wall Street Closes Higher After Fed’s Cautious Statements
Wall Street’s major indexes closed higher on Wednesday, following a volatile session, as the U.S. Federal Reserve signaled that interest rates may remain steady. The minutes from the Fed’s last meeting revealed uncertainties surrounding the economy, oil prices, and financial markets, leading to a cautious approach in policy-making.
Investors took this as an encouraging sign, with Angelo Kourkafas, senior investment strategist at Edward Jones, suggesting that the risk of over-tightening and another rate hike could be low. However, future Fed decisions will hinge on the consumer price index (CPI) readings for September, which will be released on Thursday.
In economic news, U.S. producer prices rose more than expected in September, primarily driven by higher energy costs. However, inflation pressures at the factory gate remained moderate. This mixed data added to the cautious sentiment among investors.
The Dow Jones Industrial Average gained 0.19%, the S&P 500 rose by 0.43%, and the Nasdaq Composite saw an increase of 0.71%. The energy sector performed the weakest, experiencing a decline of 1.4%. On the other hand, rate-sensitive sectors like real estate and utilities witnessed gains.
U.S. Treasury yields fell to a two-week low as safe-haven flows increased, mainly due to ongoing conflicts in the Middle East.
One notable debut on the New York Stock Exchange was that of Birkenstock Holding, whose shares closed 12.6% below their IPO price. The footwear company faced a challenging first day of trading.
In the pharmaceutical sector, drugmaker Eli Lilly saw a 4.5% increase in its stock price following the success of Danish rival Novo Nordisk’s trial for a new kidney failure treatment. However, this had a negative impact on dialysis firms DaVita and Baxter International, as their shares slumped.
On the market front, advancing issues slightly outnumbered declining ones on the NYSE, while decliners slightly outpaced advancers on Nasdaq. Both the S&P 500 and the Nasdaq Composite posted new 52-week highs and lows, indicating the mixed sentiment among investors.
Overall, trading volume on U.S. exchanges was slightly below the 20-session average, reflecting the cautious approach taken by market participants.