Wall Street closed higher on Wednesday following the release of Fed's June FOMC minutes. The latest FOMC minutes revealed that the Fed officials are in no hurry to shift from ongoing easy-money policies despite growing inflationary threat. All the three major stock indexes ended in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) was up 0.3% or 104.42 points to close at 34,681.79. Notably, 21 components of the 30-stock index ended in the green while 9 in red. Major gainer of the Dow was Apple Inc. AAPL rising 1.8%. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 rose 0.3% to end at 4,358.13, marking its 37th closing high in 2021. In intraday trading, the broad-market index posted a new all-time high of 4,361.88. The Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI) gained 1% each, while the Energy Select Sector SPDR (XLE) dropped 1.6% . Notably, seven out of eleven sectors of the benchmark index closed in the green while four in red.

Meanwhile, the tech-heavy Nasdaq Composite finished at 14,665.06, rising 1.42 points due to strong performance by large-cap technology stocks. The teach-laden index registered its 22nd record closing in 2021. In intraday trading, the index recorded a fresh all-time high of 14,755.33.

The fear-gauge CBOE Volatility Index (VIX) was down  1.5% to 16.20. A total of 10.04 billion shares were traded on Wednesday, lower than the last 20-session average of 10.07 billion. Decliners outnumbered advancers on the NYSE by a 1.02-to-1 ratio. On Nasdaq, a 1.92-to-1 ratio favored declining issues.

Fed's June FOMC Minutes

On Jul 7, the Fed released the minutes of its latest FOMC meeting conducted on Jun 15-16. In its statement after the FOMC, the Fed chairman Jerome Powell signaled that the central bank may hike the benchmark interest rate in late 2023 instead of 2024 projected earlier. The Fed also raised inflation forecast for 2021. All these developments compelled a large section of market participants to think that the Fed will shift from its ultra-dovish monetary stance sooner-than-expected.

However, the minutes have revealed that Fed officials are in no hurry to stop pursuing accommodative monetary stance despite recognizing the fact that the inflation is rising faster than expected buoyed by a robust economic recovery.

Majority of Fed officials have agreed that the economy is yet to reach the “substantial further progress.”   The Fed will think about any significant shift in its policy variables only after the economy achieved substantial progress from the pandemic-led devastations.

The FOMC minutes stated that “In coming meetings, participants agreed to continue assessing the economy’s progress toward the Committee’s goals and to begin to discuss their plans for adjusting the path and composition of asset purchases. In addition, participants reiterated their intention to provide notice well in advance of an announcement to reduce the pace of purchases.”

Economic Data

The Department of Labor reported that job openings in May fell slightly to 9.21 million in May from 9.3 million in April. The number of people who quit, retired, got laid off or were fired fell 5.32 million in May from 5.8 million in April. Job quits rate among private-sector workers declined to 2.9% in May from a record 3.2% in April.

Stock That Have Made Headline

Shell Aims to Boost Returns on Stronger Outlook

Royal Dutch Shell plc RDS.A will distribute 20-30% of cash flow from operations to shareholders starting from the second quarter, it said in an update on Wednesday. (Read More)

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