Major US stock indices slid on Wednesday as investors digested recent Federal Reserve meeting minutes for insight into plans to reduce the throttling.
The Dow Jones Industrial Average lost around 230 points, or 0.7%, after a 5-day winning streak on Tuesday. The S&P 500 lost 0.6%. The Nasdaq Composite lost 0.4%.
The Fed released its minutes of its July meeting, revealing discussions about a possible withdrawal of its monthly bond buying program this year.
“Looking to the future, most participants noted that they believed it might be appropriate to start slowing asset purchases this year, provided the economy performs as expected,” the minutes read .
The minutes found that the economy had reached its inflation target and was “almost satisfied” with the progress in employment growth.
Of course, the minutes also reflected some division within the Fed, with some members preferring to wait until early 2022 to begin reducing bond purchases.
Since that July meeting, there has been growing support within the Fed to announce a cut in September and begin in October.
“There is only this uncertainty when we turn fiscal and monetary policy over to the economy to run it alone,” Rockland Trust’s Rachael Aiken told CNBC’s “Power Lunch.” “I think the market will continue to feel volatility in this regard.”
Elsewhere, housing starts fell 7% in July to a seasonally adjusted annual rate of 1.534 million units, well below economists’ expectations.
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Investors also waded through more earnings reports from major retailers on Wednesday.
Lowe’s shares rose after the home improvement company’s earnings last quarter beat expectations, with higher home improvement sales.
The shares of the TJ Maxx parent company TJX also rose after a better-than-expected quarterly report.
Target stock pulled back despite the retailer’s outperforming second quarter earnings. The company’s profits and sales exceeded expectations and the company raised its guidance for the second half of the year with a good start to back-to-school spending.
“In the short term, the market will continue to focus on growth and delta variants, but if we can overcome these challenges, the good news about the economy and the job market should give investors a new boost in confidence, and that is exactly what will take the market to new highs before the end of the year drift, “said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance.