US stocks rose modestly early Wednesday after a broad sell-off to kick off the short week as investors waited for the latest Federal Reserve meeting minutes to be released in the afternoon.
The S&P 500 (^GSPC) rose 0.1%, while the Dow Jones Industrial Average (^DJI) added about 50 points, or 0.2%. The tech-heavy Nasdaq Composite (^IXIC) gained 0.4%.
Coinbase (COIN) was among the morning movers, up 3.5% after the cryptocurrency exchange reported fourth-quarter results that beat Wall Street estimates and full-year losses that were narrower than expected. what was feared
In other specific names, shares of Palo Alto Networks (PANW) rose nearly 12% after the cybersecurity firm raised its full-year earnings outlook and said it was working on cost management.
Chinese search engine Baidu (BIDU) reported better-than-expected fourth-quarter results, driven by strength in its cloud, advertising and artificial intelligence segments. Shares rose 6%.
Stock meme darling AMC Entertainment (AMC) was on call after the Allegheny County Employees’ Retirement System filed a class action lawsuit in Delaware alleging the theater company created preferred stock without its permission. The stock rose 3.7% on Wednesday morning.
In the bond market, Treasury yields held steady early in the day after rising sharply on Tuesday to the highest levels since November.
The moves follow a sharp sell-off on Tuesday that sent the S&P 500 plummeting 2% below 4,000, the Dow erased 700 points and the Nasdaq plunged 2.5%; The moves came as investors tightened their expectations for higher interest rates for longer.
St. Louis Fed President James Bullard, in a televised interview with CNBC Wednesday morning, said the US central bank should drive the federal funds rate to a range of 5.25 % to 5.5% to bring inflation back down to its 2% target.
New York Fed President John Williams will also speak later in the day. In a speech earlier this month, he said Fed officials plan to stay the course of their rate hike campaign until inflation falls to their 2% target.
Minutes of the meeting of the Federal Open Market Committee (FOMC) from January 31 to February 2. 1 will offer insight into the thinking behind officials’ 25 basis point interest rate hike earlier in the month. Cleveland Fed President Loretta Mester admitted in a speech last week that she would have preferred raising interest rates by 0.50%, but officials did not want to surprise markets, which were trading at 25 basis points. .
“While the stock market has staged an impressive rally so far this year, markets are still trying to adjust to the reality that the Federal Reserve is unlikely to change course and instead is still focused on fight inflation, which suggests investors should be prepared for interest rates to stay higher for longer,” Carol Schleif, chief investment officer at BMO Family Office, said in a note.
“Wednesday’s FOMC minutes report is sure to reveal a closer look at the Fed’s thinking, especially given recently released inflation and employment numbers, which are still elevated and illustrative of a rising economy.”
Wall Street banks have revised their expectations regarding the upcoming rate hikes by the Federal Reserve.
The teams at Goldman Sachs and Bank of America said last week that they estimate three more rate hikes this year. Before the February interest rate hike, some market participants had seen that such a move could mark the end of the Federal Reserve’s rate-raising cycle.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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