Fed sees rate hikes on track; continued U.S. growth

The Dow Jones Industrial Average was up 0.30% or 75.40 points at 25,037.88 while the S&P 500 edged up 0.39% at 2,714.61.

The Dow and S&P dropped for a second consecutive session and the Nasdaq fell for a third straight on Wednesday after minutes from the US Federal Reserve's January meeting showed the central bank's rate-setting committee grew more confident in the need to keep raising rates.

Gains in technology and industrial shares helped USA stocks rebound from a two-day fall on Thursday as investors shrugged off the prospects of more interest rate hikes this year. In the last minutes of trade, however, the good mood was dazzled by the 10-year USA government bond yield, which reached a four-year high of 2.95%.

The spin from traders concerning the Fed minutes evolved rapidly during the day, as folks realized that the initial dovish take was misguided for a few reasons.

However, minutes of that meeting released Wednesday indicated that Fed officials in their two days of discussions expressed the view that prospects for the global economy were brightening.

"It may be appropriate later this year to begin an assessment of our current monetary policy framework and alternatives", Mester said in prepared remarks to a conference of central bankers and economists in NY. When Powell's appointment was first confirmed, stocks and bonds headed higher on the common view that he was a "safe pair of hands" and most likely to continue the policy pursued by Yellen.

Noting a rise in business optimism, an increase in business investment, a strengthening labor market and an accelerating pace of economic growth, Quarles said the underlying fundamentals of the US economy are strong. Growth has risen to an annual 3%, the United States is near full employment with the jobless rate down to 4.1% and Trump's tax cuts have boosted corporate profits and workers' pay.

"Because although it will discount equities and create more volatility, it is a sign that secular stagnation, disinflation.are finally in the rearview mirror and now we're in a normal market", he said, referring to a period framed by easy-money policies across much of the globe in the wake of the 2007-09 financial crisis. As business adviser Irwin Stelzer commented: "Almost coincident with a jobs report that showed the economy to be strong and wages rising, the Fed perceptively announced that the economy was strong and wages were rising".

"Recently, he has been tilting hawkish and so may be indicative of a gradual shift in the center of gravity of the FOMC". Shares of General Mills were off 3.7%.

Chesapeake Energy Corp shares surged 21.67 per cent, their biggest daily per centage gain since April 2016, after the company's quarterly results and outlook.

HPE also provided offered better-than-expected guidance for the next quarter and for full fiscal year 2018.

How are other assets performing?

But Randy Frederick, vice president of trading and derivatives at Charles Schwab, said he thinks the market may have recovered a little too fast from its lows.

  • Wendy Palmer