U.S. stocks pulled back from their best levels of the day on Thursday afternoon, but clung to modest gains, as minutes from the Federal Reserve’s most recent gathering in June acknowledged intensifying risks from trade policies emanating from the Trump administration.
However, those concerns weren’t sufficient to deter policy makers from signaling further rate increases in the future on the back of healthy economic expansion thus far, minutes indicated.
What are markets doing?
The Dow Jones Industrial Average DJIA, +0.56% traded up 105 points, or 0.4%, to 24,281. The S&P 500 SPX, +0.68% added 15 points to 2,728, a gain of 0.6%. The Nasdaq Composite Index COMP, +0.97% rose 58 points, or 0.8%, to 7,558.
Technology shares and consumer-staples shares were both up by at least 1%, highlighting broad-based gains across the S&P 500’s 11 sectors. Only energy shares, down 0.2%, were in negative territory.
Trading was lighter than normal, with many market participants still out for the Fourth of July break, for which U.S. markets were closed on Wednesday.
What is driving the market?
An account of the Fed’s two-day meeting ended June 13, revealed that the policy-setting the Federal Open Market Committee saw negative risks from U.S. trade policy, saying it “had intensified” and indicating that a tit-for-tat tariff clash could have negative effects on business sentiment and investment spending, according to the minutes of minutes released Thursday at 2 p.m. Eastern Time showed.
Despite the headwinds from trade clashes, the Fed said there was broad support for continued “gradual” rate increases. Officials noted that the benchmark federal-funds rate could be at or above its “neutral” level “sometime next year.” At the June meeting, the central bank lifted the fed-funds rate by a quarter of a percentage point