Wall Street closes mixed following volatile session
In a volatile session on Wednesday, Wall Street painted a mixed picture at the end of the day as the Dow Jones Industrial Average recorded gains while the S&P 500 remained near its opening level and the Nasdaq Composite dropped.
Following a two-day meeting, the Federal Reserve decided to lift the benchmark lending rate by 25 basis points and in its statement, the FOMC repeated that the economy has been expanding moderately and shared the first clear details about its plan to shrink its balance sheet. According to Reuters, the initial cap for the reduction of the Fed's Treasuries holdings would be set at $6 billion per month, increasing by $6 billion increments every three months over a 12-month period until it reached $30 billion per month.
Furthermore, Chairwoman Yellen's remarks during the press conference showed that the Committee's confidence in the economy hasn't changed. Boosted by the optimistic outlook and the hawkish tone, strong performance of the financials pushed Dow Jones Industrial Average higher by 46.09 points, or 0.22%, to 21,374.56.
The sharp fall seen in crude oil prices weighed on the energy shares and countered the positive effects of the financials on the S&P 500 and the index closed the day 3.5 points lower, at 2,434.50. Finally, another sell-off in technology shares dragged the heavy-tech Nasdaq Composite 1% lower in the session, however, with a late recovery, the index closed the day at 6,194.89, losing 25.48 points, or 0.41% on the day.
Headlines from the U.S. session:
- Fitch: Fed heading for faster-than-expected normalisation
- Comparison Between June and May FOMC Statements - Nomura
- Fed hikes and points to more, future balance sheet changes slow & steady - ING
- Fed's Yellen: We could start trimming balance sheet relatively soon
- Fed's Yellen: I don't think regulations have played a big role in impeding the economy
- Fed's Yellen: We could revisit in the future the right level of its inflation target
- Fed's Yellen: Growth has picked up somewhat, but remains low
- Fed's Yellen: Important not to overreact to a few inflation readings; data can be noisy
- Fed's Yellen: Fully intends to serve out term as Chair
- Fed's Yellen: Employment is near maximum sustainable level
- Fed's Yellen: Steady labor participation is positive
- FOMC's decisions regarding monetary policy implementation - Jun 14, 2017
- Fed raises rates by 25 bps; second hike of 2017
- EIA: U.S. commercial crude oil inventories decreased by 1.7 mln barrels
- US: Manufacturers’ and trade inventories were estimated at $1,854.2 billion
- US: Advance estimates of retail and food services sales for May 2017 were $473.8 billion