U.S. market indexes were higher in trading on Wednesday.
For the day the Dow Jones Industrial Average closed at 17,918.62 for a gain of 78.00 points or 0.44%. The Standard & Poor's 500 was also higher, closing at 2,099.73 for a gain of 11.18 points or 0.54%. The Nasdaq Composite closed higher at 4,859.16 for a gain of 36.26 points or 0.75%. The VIX Volatility Index was lower at 15.12 for a loss of 0.46 points or 2.95%.
In the Dow Jones Industrial Average, stocks leading gains for the day included the following:
- Merck (MRK, Financial) 2.01%.
- Home Depot (HD, Financial) 1.73%.
- Cisco (CSCO, Financial) 1.45%.
- ExxonMobil (XOM, Financial) 1.18%.
- JPMorgan (JPM, Financial) 1.13%.
A number of economic reports influenced trading on Wednesday with the leading factor being the Federal Reserve’s June Federal Open Market Committee Meeting Minutes. The Mortgage Bankers Association’s mortgage applications report showed mortgage applications up 14.2% from the previous week and refinancings up 21%. The May International Trade report showed the U.S. trade deficit widening to -$41.1 billion with greater imports than exports. Reports on services were improved on Wednesday. The PMI Services Index increased to 51.4 from 51.3. The ISM Non-Manufacturing Index also increased to 56.5 from 52.9.
The Federal Reserve’s June Federal Open Market Committee Meeting Minutes was the key focus for the day. The June Meeting Minutes, released in the afternoon, showed the Fed’s hesitancy to raise rates ahead of the Brexit vote and following a May jobs report that showed an increase of only 38,000 jobs. Friday’s jobs report will be of key importance as the Fed takes into consideration all market factors affecting monetary policy. A strong jobs report combined with the recently increased first quarter GDP report of 1.1% SAAR could position the economy for a potential rate increase this year. However, in the Fed’s June Meeting Minutes the FOMC gave no indication on the timing for the next rate increase.
Markets have begun to lower the probability of a rate increase this year; however, if economic indicators continue to move toward Fed targets a rate increase could help keep U.S. bond trading from Brexit panic. In a CNBC report Wednesday, Bill Gross gave his insight on the June FOMC Meeting Minutes and discussed global yields overall.
Disclosure: I do not own any shares of any stocks included in this article.
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