U.S. stocks traded mixed on Wednesday as uncertainty over the economy and the Federal Reserve’s direction weighed on valuations for the day.
On Wednesday, the Dow Jones Industrial Average closed lower at 17,526.62 for a loss of 3.36 points or 0.02%. Financial stocks led the Index for the day with JPMorgan (JPM, Financial), Goldman Sachs (GS, Financial) and American Express (AXP, Financial) all reporting gains while Nike (NKE, Financial) and Walmart (WMT, Financial) led losses.
The Standard & Poor's 500 Index was higher for the day at 2,047.63 for a gain of 0.42 points or 0.02%. The Nasdaq Composite Index was also higher at 4,739.12 for a gain of 23.39 points or 0.50%. The VIX Volatility Index traded considerably higher for the day at 16.04 for a gain of 0.47 points or 3.02%.
The Federal Reserve’s release of its April meeting minutes was the main focus for the day, causing increased volatility in the market. The meeting minutes gave further evidence that the Fed could slow the pace of rate increases for 2016 as signs of caution continue to show in the U.S. and globally. In the U.S. recent GDP and employment data has weakened; globally there are major challenges the Fed must consider including the U.K.’s potential exit from the European Union, the Eurozone’s deal talks over varying provisions for a Greek bailout and economic data in China, which is still a concern.
As stocks traded mostly flat on Wednesday, investors considered multiple scenarios and speculators reported on the need for transparency. While the Fed could increase rates in June, given the current domestic and global environment, it seems the affect on the dollar will be one of the greatest factors. With this as a main concern the Fed will most likely provide added direction through either Fed speeches leading up to the June meeting or at the June meeting specifically, which allow for less market volatility and more of an impact on the key factors the Fed is trying to target.
In a CNBC interview Wednesday following the release of the Fed statement, market specialists provided the following insights on the Federal Reserve’s monetary policy direction.
