Wall Street bounced off session lows Wednesday with the S&P 500 crossing into positive territory by the closing bell after the U.S. Federal Reserve released meeting minutes, which said that while the central bank intends to begin raising interest rates to combat inflation, its decisions would be made on a meeting-by-meeting basis.
The minutes showed that while policymakers agreed that it would "soon be appropriate" to raise the Fed's benchmark overnight interest rate from its near-zero level, they would re-assess the rate hike timeline at each meeting.
"The fact the Fed was not more hawkish than previously thought seems to have rescued stocks for the moment, anyway," said Lou Brien, strategist at DRW Trading in Chicago. "The market was worried the aggressive policy stance of (St. Louis Fed President James) Bullard was more widespread but this doesn't seem to be the case."
All three major U.S. stock indexes spent most the session deep in negative territory, as investors contended with shifting geopolitical tensions and a raft of data suggesting that the U.S. economy is heating up, thereby bolstering the Federal Reserve's case for aggressive rate tightening.
But after the release of the Fed minutes, the indexes gyrated, eventually erasing losses. The Nasdaq and the Dow closed modestly lower.
"It seems like the Fed didn’t rock the boat too much," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "It didn’t throw that hawkish curve ball we saw six weeks ago and that was a relief to a lot of investors."
A raft of economic data on Tuesday showed a sharp rebound in retail sales, stronger than expected industrial output, and core import prices reaching an all-time high.
"Today's retail sales number was extremely strong," Detrick added. "It confirms the consumer is still very healthy and that's a good sign for the economy going forward."
The United States and NATO are still concerned about Russian troops near the Ukrainian border, refuting Russia's claim on Tuesday that it was withdrawing troops and questioning President Vladimir Putin's stated desire to negotiate a diplomatic solution to the crisis.
Even so, geopolitical tensions appear to have abated somewhat.
"It might be a 'no news is good news' scenario," Detrick said. "Global markets have calmed as the headline risk continues to decline over last two days."
The Dow Jones Industrial Average fell 54.57 points, or 0.16%, to 34,934.27, the S&P 500 gained 3.94 points, or 0.09%, to 4,475.01 and the Nasdaq Composite dropped 15.66 points, or 0.11%, to 14,124.10.
Eight of the 11 major S&P 500 sectors posted gains on the day, with energy stocks enjoying the largest percentage gain. Tech and communication services were the only percentage losers, with financials flat on the day.
Shares of ViacomCBS tumbled 17.8% after the media conglomerate missed quarterly profit expectations.
Short-term rental company Airbnb advanced 3.6% following its better-than-expected first-quarter revenue forecast, driven by a strong rebound in travel demand.
Devon Energy Corp gained 4.7% after the oil producer reported fourth-quarter results above Wall Street estimates.
Lockheed Martin rose 1.2% after being selected to develop prototype next generation U.S. Marine Corps 5G communications.
Cisco Systems Inc gained more than 5% in after-hours trading after the networking equipment maker beat quarterly revenue expectations.
Advancing issues outnumbered declining ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted 16 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 45 new highs and 103 new lows.
Volume on U.S. exchanges was 10.26 billion shares, compared with the 12.55 billion average over the last 20 trading days.
