S&P, Nasdaq edge higher as Wall Street shrugs off Fed minutes

NEW YORK: The S&P 500 and the Nasdaq inched higher on Wednesday, as investors largely shrugged off benign U.S. inflation data and unsurprising minutes from the Federal Reserve’s March meeting.

Tech stocks led the S&P 500 and the Nasdaq into positive territory, while industrials weighed on the Dow.

The three major U.S. stock indexes were relatively unchanged after the release of the Fed’s minutes, which reaffirmed the central bank’s patience regarding future interest rate hikes.

“It’s a non-event,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. “There were no surprises.”

“(The Fed) still sees inflation as somewhat subdued.”

Indeed, core U.S. consumer prices (CPI), which strip out volatile food and energy segments, rose at its slowest annual pace in over a year, according to the Labor Department’s CPI report.

The tepid inflation data appeared to lend further support to the Fed’s decision to suspend its three-year interest rate hike campaign.

“The CPI numbers support the Fed’s outlook,” Hellwig added. “The core number shows no inflation and the headline reflects higher gasoline prices, which is a headwind for growth, a tax on consumers.”

Top executives from some of the largest U.S. banks testified before congress for the first time since the 2007-2009 financial crisis, just days before reporting earnings amid lowered analyst expectations.

First quarter analyst forecasts have dropped steadily in the last six months, and S&P 500 earnings are now seen falling by 2.5%, which would mark the first year-on-year contraction since 2016, according to Refinitiv data.

The earnings season began in earnest as Delta Air Lines lifted its revenue forecast after posting better-than-expected profits, lifting the airliner’s stock by 1.6%.

Levi Strauss & Co posted a 7% rise in revenue in its first earnings report since returning to the public market. Its shares were up 5.0%.

The Dow Jones Industrial Average fell 16.68 points, or 0.06%, to 26,133.9, the S&P 500 gained 5.62 points, or 0.20%, to 2,883.82 and the Nasdaq Composite added 32.86 points, or 0.42%, to 7,942.14.

Of the 11 major sectors in the S&P 500, eight were in positive territory.

Industrial stocks were weighed down by Boeing Co as the plane maker extended its losses after reporting a drop in new aircraft orders due to the worldwide grounding of its 737 MAX jets. Its shares were down 0.9%.

Tesla Inc got a boost after U.S. lawmakers introduced legislation that would expand the electric vehicle tax credit. The company’s stock rose 1.3%.

Houseware retailer Bed Bath & Beyond was up 4.4% ahead of its quarterly results expected after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 2.89-to-1 ratio; on Nasdaq, a 2.02-to-1 ratio favored advancers.

The S&P 500 posted 23 new 52-week highs and no new lows; the Nasdaq Composite recorded 61 new highs and 30 new lows.