NEW YORK (Reuters) – U.S. stocks slightly pared gains on Thursday after the release of minutes from the Federal Open Market Committee’s June meeting, though they remained in positive territory.
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 28, 2018. REUTERS/Brendan McDermid
The minutes reflected confidence among the Federal Reserve’s policymakers in the strength of the U.S. economy and its plans for future interest-rate hikes. In the June meeting, the Fed increased rates for the second time this year, and it has signaled that additional increases are likely.
“The market’s expectation always was that when we get back to neutral the Fed would stop raising rates,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “That’s the type of statement that will spook investors, knowing the Fed may tighten beyond the neutral level.”
Earlier, U.S. stocks rose as reports suggested that the United States could walk back threatened tariffs on European cars if the European Union scrapped duties on U.S. cars in return.
Technology stocks led gains on the S&P 500, with shares of several chipmakers rising. The Philadelphia semiconductor index rose 2.3 percent.
Still, the Trump administration’s tariffs on $34 billion worth of Chinese imports are due to go into effect at 0401 GMT on Friday. Beijing said it would respond immediately and in equal measure on U.S. goods ranging from cars to soybeans.
There was no evidence of any last-minute negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.
Investors, however, were relatively unfazed, suggesting that Friday’s impending tariffs had already been priced into stocks.
“There’s a lot of uncertainty, but the markets have reacted fairly calmly and rationally,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.