Stocks hit records as Fed minutes suggest inflation surge is temporary

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Stocks rallied to record highs Wednesday as investors took solace in the minutes from the latest Federal Reserve policy meeting which indicated the central bank was in no hurry to raise rates. 

The Dow Jones Industrial Average rose 104 points, or 0.3%, while the S&P 500 and the Nasdaq Composite advanced 0.34% and 0.01%, respectively. Both the S&P 500 and the Nasdaq finished in record territory. 

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 34792.67 -323.73 -0.92%
SP500 S&P 500 4402.66 -20.49 -0.46%
I:COMP NASDAQ COMPOSITE INDEX 14780.533084 +19.24 +0.13%

The minutes from the Fed's June meeting showed the central bank has been caught off guard by the recent rise in inflation. However, while members expect inflation to climb above 2% in the near term, they still believe the gains are temporary. 

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The bond market is showing no signs of worry over inflation with the yield on the 10-year note falling 4.8 basis points at 1.321%, the lowest close since Feb. 18.

In stocks, the drop in the 10-year yield weighed on banks, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp., that benefit from a steeper yield curve. 

Ticker Security Last Change Change %
JPM JPMORGAN CHASE & CO. 151.24 -1.65 -1.08%
C CITIGROUP, INC. 68.52 -0.36 -0.52%
BAC BANK OF AMERICA CORP. 38.27 -0.28 -0.73%

Credit card names were active after American Express received an upgrade from Goldman Sachs on Tuesday and Visa's CEO disclosed to CNBC that $1 billion was spent on goods and services via cryptocurrencies in the first half of the year. 

Ticker Security Last Change Change %
V VISA, INC. 236.67 -0.42 -0.18%
AXP AMERICAN EXPRESS CO. 168.06 -0.98 -0.58%

Meanwhile, Big Tech names like Apple Inc. and Microsoft Corp. continued their recent outperformance as Amazon moved closer to a $2 trillion market value. Social media companies including Facebook Inc. and Twitter Inc. lagged after former President Donald Trump filed a lawsuit against the companies, claiming he was unfairly censored. 

Ticker Security Last Change Change %
AAPL APPLE, INC. 146.95 -0.41 -0.28%
MSFT MICROSOFT CORP. 286.51 -0.61 -0.21%
AMZN AMAZON.COM, INC. 3,354.72 -11.52 -0.34%
FB FACEBOOK, INC. 358.92 +7.68 +2.19%
TWR n.a. n.a. n.a. n.a.
GOOGL ALPHABET, INC. 2,702.51 -10.09 -0.37%

Energy names remained headwinds for the broader market as West Texas Intermediate crude slipped $1.16 to $72.21 a barrel.  

Elsewhere in commodities, Barrick Gold Corp. and Newmont Mining Corp. rallied as gold climbed $8 to $1,801.50 an ounce. 

Ticker Security Last Change Change %
GLD SPDR GOLD SHARES TRUST - EUR ACC 169.53 +0.04 +0.02%
GOLD BARRICK GOLD CORP. 21.65 -0.07 -0.32%
NEM NEWMONT CORP. 61.86 -0.79 -1.26%

Overseas markets were mostly higher. 

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European bourses all gained with France’s CAC up 0.31%, Britain’s FTSE 100 advancing 0.71% and Germany’s DAX 30 rising 1.17%. 

In Asia, China’s Shanghai Composite gained 0.67% while Hong Kong’s Hang Seng index and Japan’s Nikkei 225 declined 0.4% and 0.96%, respectively.