U.S. Stocks Move Mostly Higher Ahead Of Fed Minutes

Stocks have moved mostly higher over the course of morning trading on Wednesday, regaining ground following the pullback seen in the previous session. The major averages have all moved to the upside, with the tech-heavy Nasdaq leading the advance.

In recent trading, the major averages have pulled back off their highs of the session. The Dow is up 174.07 points or 0.6 percent at 32,102.69, the Nasdaq is up 118.70 points or 1.1 percent at 11,383.15 and the S&P 500 is up 28.76 points or 0.7 percent at 3,970.24.

The strength on Wall Street may reflect another bout of bargain hunting, with the Nasdaq rebounding after ending Tuesday’s trading at its lowest closing level since November 2020.

Trading activity remains somewhat subdued, however, as traders look ahead to the release of the minutes of the latest Federal Reserve meeting.

The Fed is due to release the minutes of its May 3-4 meeting at 2 pm ET. At the meeting, the central bank decided to raise interest rates by 50 basis points.

Traders are likely to look to the minutes for clues about how aggressively the Fed plans to raise interest rates at upcoming meetings.

CME Group’s FedWatch Tool currently indicates a 93.3 percent chance the Fed will raise rates by another 50 basis points at its next meeting in mid-June.

On the U.S. economic front, a report released by the Commerce Department showed new orders for durable goods increased by less than expected in the month of April.

The Commerce Department said durable goods orders rose by 0.4 percent in April after climbing by a downwardly revised 0.6 percent in March.

Economists had expected durable goods orders to advance by 0.6 percent compared to the 1.1 percent jump that had been reported for the previous month.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the modest increase in durable goods orders “suggests that rate-sensitive business equipment investment growth is beginning to slow.”

Excluding orders for transportation equipment, durable goods orders edged up by 0.3 percent in April after surging by 1.1 percent in March. Ex-transportation orders were also expected to increase by 0.6 percent.

Housing stocks have moved sharply higher over the course of morning trading, driving the Philadelphia Housing Sector Index up by 3.2 percent.

Toll Brothers (TOL) is posting a standout gain after the luxury home builder reported better than expected fiscal second quarter results.

Substantial strength has also emerged among retail stocks, as reflected by the 2.5 percent jump by the Dow Jones U.S. Retail Index. The index is bouncing off its lowest closing level in two years.

Urban Outfitters (URBN), Nordstrom (JWN) and Dick’s Sporting Goods (DKS) are also posting strong gains after reporting their quarterly results.

Energy stocks are also seeing considerable strength on the day, moving higher along with the price of crude oil. Crude for July delivery is jumping $1 to $110.77 a barrel.

Airline, computer hardware and banking stocks have also moved notably higher, while gold stocks are bucking the uptrend amid a decrease by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets have all moved to the upside over the course of the session. While the French CAC 40 Index is up by 1 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.7 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.767 percent.

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