Stocks Closed higher After Fed Meeting Minutes

4:00 pm Wednesday, July 06th, 2022

Stocks turned higher on Wall Street in choppy trading Wednesday following the release of minutes from the Federal Reserve’s most recent policy meeting.

The major averages jostled around following the release of the FOMC’s June policy meeting minutes.

Interestingly, many participants judged that a significant risk now facing the Committee was that elevated inflation could become entrenched if the public began to question the resolve of the Committee to adjust the stance of policy as warranted.

In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives. In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.

Energy futures are trading near intraday lows with the exception of natural gas futures, which are up 0.2% to $5.50/mmbtu. WTI crude oil futures are down 2.7% to $96.76/bbl. Unleaded gasoline futures are down 2.8% $3.23/gal.

Treasuries have been a bit of a hot mess today with wide swings across the curve. In particular, the 2-yr note yield reached 2.76% before today’s open but was pushing 2.92% a short time ago. The 10-yr note yield flirted with 2.74% before today’s open but now sits at 2.89%. The upswing gathered some momentum after the 10:00 a.m. ET release of the better-than-expected June ISM Non-Manufacturing Index and the May JOLTS – Job Openings Report, which showed 11.254 million job openings; however, things have cooled down some more recently. The 2-yr note yield is back to 2.88%.

The mega caps are offering a bit of support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) is trading flat while the S&P 500 is down 0.3%. The Invesco Equal Weight ETF (RSP) is down 0.6%.

The U.S. Dollar Index was up 0.6% to 107.16 as the euro continues to slip toward parity with the dollar (EUR/USD -0.9% to 1.0171).