Wall Street stocks break higher on lukewarm FOMC’s minutes and easing geopolitical picture

• FOMC’s minutes suggests a rate hike at the next Fed meeting but no big surprises as stock indices rise. 
• US President Trump said that the meeting with North Korean leader Jong Un scheduled for June 12 in Singapore “could very well happen.”

The three main US stock indices closed higher on Wednesday’s trading. The S&P 500 Index gained 0.32% to 2,733.29 while the Dow Jones Industrial Average rose 0.21% to 24,886.81. The Nasdaq Composite Index was up 0.64% to 7,424.96. 

The main macroeconomic event was the release of the FOMC’s minutes. While the report suggested a rate hike at the next Fed meeting, stock investors were not too worried about galloping inflation and US indices rose.  

Indeed, “most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the FOMC to take another step in removing policy accommodation,” the minutes said.

"A few participants commented that recent news on inflation, against a background of continued prospects for a solid pace of economic growth, supported the view that inflation on a 12-month basis would likely move slightly above the Committee's 2% objective for a time," according to the minutes. "It was also noted that a temporary period of inflation modestly above 2% would be consistent with the Committee's symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective."

But the minutes also said that many saw “little evidence of overheating of labor market with wage pressures still moderate.”

Looking back, after seven years of near-zero interest rates, the FOMC started raising rates in December 2015. The current target range is at 1.5% to 1.75%.

Earlier in the day, stock markets were concerned by geopolitical factors. The US President Trump said that he was not satisfied with the US-China trade talks. Additionally, he said that the meeting with the North Korean leader Jong Un scheduled for June in Singapore was likely to be canceled. However, the latest news reveals that the summit “could very well happen.” Further adding: “ if we go, I think it will be a great thing for North Korea," said Trump.

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