- US stocks eked out small gains on Wednesday after Federal Reserve minutes revealed no surprises to investors.
- The minutes showed plans for interest rate hikes to begin in March and the possibility for a faster balance sheet reduction.
- US retail sales rose 3.8% in January, rebounding to the highest level in 10 months amid rising inflation.
US stocks whipsawed in afternoon trading to close mixed after the release of the minutes of the last meeting of the Federal Open Market Committee.
The minutes offered few surprises and revealed the likelihood of interest rate hikes to begin in March. It also showed the Fed could quicken the pace of its balance sheet reduction plans if needed as it seeks to tame rising inflation.
"The Fed minutes did indicate a faster pace of tightening relative to the last hiking cycle is warranted. On balance, there was nothing in the minutes that suggested the Fed would be more aggressive than what the market has already priced in," Allianz Investment Management's Charlie Ripley told insider.
Here's where US indexes stood at the 4:00 p.m. ET close on Wednesday:
- S&P 500: 4,475.01, up 0.09%
- Dow Jones Industrial Average: 34,934.27, down 0.16% (54.57 points)
- Nasdaq Composite: 14,124.09, down 0.11%
Rising inflation has been top of mind for investors in recent weeks after the CPI Index surged to a 40-year high in January, but consumers are still spending.
US retail sales rose in January, rebounding to the highest level in 10 months as consumers shrugged off the wave of Omicron infections. Sales jumped 3.8%, ahead of economist estimates for a 2% rise, and well ahead of December's 2.5% drop.
"The strong, broad-based rebound in retail sales after the weak December is particularly impressive given the drag from the Omicron variant and serves as a reminder that the U.S. consumer doesn't stay down for long. Perhaps economic growth expectations for the first quarter have gotten overly pessimistic," LPL's Jeff Buchbinder told Insider.
Pricing pressures are also being felt overseas, with the UK reporting inflation of 5.5% in January, representing a 30-year high and putting pressure on the Bank of England to raise interest rates.
One reason for the surge in inflation is because of "terrible CEOs," according to billionaire investor Carl Icahn. The activist investor said in a HBO documentary that too many executives are not held accountable in the US and are to blame for the rise in prices and widening of the wealth gap.
Roblox plunged 25% on Wednesday after its earnings report revealed a slowdown in growth and missed Wall Street estimates.
Shopify stock fell 18% after its fourth-quarter earnings report beat analyst estimates but revealed an outlook for slower revenue growth in 2022.
West Texas Intermediate crude oil fell as much as 1.04% to $91.11 per barrel. Brent crude, oil's international benchmark, dropped as much as 1.16% to $92.20 per barrel.
Gold rose as much as 0.96% to $1,874.00 per ounce. The yield on the 10-year Treasury fell 1 basis point to 2.03%.
