US benchmark equity indexes closed mixed Wednesday as traders analyzed the minutes from the Federal Reserve's December meeting. The Dow Jones Industrial Average rose by 0.3%, closing at 42,635.2, while the S&P 500 advanced 0.2% to 5,918.3. In contrast, the Nasdaq Composite saw a minor decline of 0.1%, finishing at 19,478.9.
The sectors leading the market included health care, materials, and consumer staples, whereas communication services experienced the most significant drop. Notably, US stock markets will be closed Thursday in honor of former President Jimmy Carter's passing. Almost all Federal Open Market Committee (FOMC) members reached a consensus last month that upside risks linking to inflation expectations had increased, attributed to strong price growth data and potential shifts in trade and immigration policies.
This insight emerged from the minutes of the FOMC's December 17-18 meeting released on Wednesday. "Several participants observed that the disinflationary process may have stalled temporarily or noted the associated risks," highlighted the minutes. During the meeting, the FOMC opted for a modest reduction of its benchmark lending rate by 25 basis points while indicating a more conservative outlook for future cuts than projected in September.
Fed Governor Christopher Waller provided insight on Wednesday regarding inflation trends, stating expectations of a decline to the Fed's 2% target over the medium term, suggesting that further easing of monetary policy would be 'appropriate.' He remarked, "After a period of rapid disinflation in 2022 and 2023, progress seems to have stalled in the closing months of 2024." The market anticipates that the FOMC will maintain current interest rates at their upcoming meeting this month, as suggested by the CME FedWatch tool.
Meanwhile, the US 10-year yield saw a slight increase of one basis point, reaching 4.7%, while the two-year rate remained relatively unchanged at 4.29%. An analysis of private employment data revealed that the US job market moved forward with an advancement of 122,000 jobs in December, as reported by Automatic Data Processing (ADP).
This figure falls short of the 139,000 increase forecasted in a Bloomberg survey. ADP's Chief Economist, Nela Richardson, commented on this trend, stating, "The labor market downshifted to a more modest growth pace in the final month of 2024, with noticeable slowdowns in hiring and wage increases." Furthermore, there was an unexpected decline in weekly applications for unemployment insurance in the US, although continuing claims witnessed an upward trend as derived from governmental data.
Anticipation builds for data from the Bureau of Labor Statistics, expected to be released on Friday, which is predicted to showcase that the US economy added 163,000 nonfarm jobs last month—a reduction compared to the 227,000 jobs created in the previous month, as estimated by a Bloomberg survey. In corporate news, Meta Platforms announced its plans to roll out a test in the US, France, and Germany, allowing buyers to browse eBay listings through Facebook Marketplace before concluding transactions on eBay.
Following this announcement, eBay's shares surged by 9.9%, making it the top gainer on the S&P 500, while Meta's stock fell by 1.2%. Boston Scientific took the second spot among S&P 500 performers, up 4.3%, after announcing it would acquire Bolt Medical shares it doesn't already own for $443 million, plus milestone payments.
Conversely, Edison International shares plunged by 10%, marking the most significant decline on the S&P 500 for the day. Moderna was not far behind, ranking as the second-worst performer on the S&P 500 with a decline of 9.2%, primarily following a price target reduction by UBS for the pharmaceutical company’s stock, now set at $96, down from $108.
In commodity markets, West Texas Intermediate crude oil prices experienced a decrease of 1.2%, priced at $73.33 per barrel on Wednesday. Data revealed that commercial crude stockpiles in the US fell slightly below expectations last week, as notable inventory builds in motor gasoline and distillate fuel were recorded.
In precious metals, gold prices increased by 0.6%, settling at $2,680.20 per troy ounce, while silver prices rose by 0.3%, reaching $30.78 per ounce..