U.S. Stocks Close On Firm Note; Dow, S&P Post New Record Highs

(RTTNews) - U.S. stocks started off on a somewhat flat note on Wednesday, but gained in strength as the day progressed, as investors assessed the minutes of the Federal Reserve's most recent policy meeting, and looked ahead to the nation's consumer price and producer price inflation data for more clarity on interest-rate trajectory.

The major averages all closed on a buoyant note, with the Dow and S&P 500 moving on to fresh record highs. The Dow ended with a gain of 431.63 points or 1.03 percent at 42,512.00. The S&P 500 closed up 40.91 points or 0.71 percent at 5,792.04, while the Nasdaq settled higher by 108.70 points or 0.6 percent to 18,291.62.

Apple Inc, Amazon, JPMorgan Chase, Oracle Corporation, Costco Wholesale Corporation, Merck, IBM, Caterpillar, Qualcomm and Texas Instruments gained 1 to 3 percent.

Morgan Stanley, Amgen, Uber Technologies, Goldman Sachs, Honeywell International and Palo Alto Networks also ended notably higher.

Alphabet closed down 1.6 percent, after the U.S. Department of Justice said it may ask a judge to force Google to divest parts of its business, including the Chrome browser and Android operating system, to curtail its search monopoly.

Tesla ended down 1.4 percent. Meta Platforms, Advanced Micro Devices, Salesforce and Adobe Inc. also closed weak.

The minutes from the Federal Reserve's September meeting showed official agreed to cut interest rates but were unsure how aggressive to get, and ultimately decided on a half percentage point move, aiming to balance confidence on inflation with worries over the labor market.

The minutes said that policymakers decided to approve a jumbo rate cut of 50 basis points for the first time in more than four years, and also showed members divided over the economic outlook.

Some officials hoped for a smaller, quarter percentage point reduction as they sought assurance that inflation was moving sustainably lower and were less worried about the jobs picture.

The minutes noted that the vote to approve the 50 basis point cut came "in light of the progress on inflation and the balance of risks" against the labor market. The minutes noted that "a substantial majority of participants" favored the larger move, without specifying how many were opposed. The term "participants" suggests involvement of the full FOMC rather than just the 12 voters.

The minutes also noted that some members favored a reduction at the July meeting that never materialized.

In economic news, data from the Commerce Department said U.S. trade deficit shrank to $70.4 billion in August from a revised $78.9 billion in July. Economists had expected the trade deficit to decrease to $70.6 billion from the $78.8 billion originally reported for the previous month.

The narrower trade deficit came as the value of imports shot up by 2.0 percent to $271.8 billion, while the value of imports decreased by 0.9 percent to $342.2 billion.

In overseas trading, Asian stocks ended mixed on Wednesday as China's stimulus rally fizzled out, the conflict in the Middle East persisted and investors awaited Federal Reserve meeting minutes as well as U.S. inflation data for interest rate clues.

Chinese stocks plunged as investors booked profits after recent rallies. The benchmark Shanghai Composite Index slumped 6.6 percent to 3,258.86 after officials failed to boost confidence in stimulus plans aimed at reviving the economy.

European stocks closed higher on Wednesday with traders building up some long positions ahead of the release of the minutes of the Federal Reserve's most recent policy meeting.

The mood was positive as investors hoped the Chinese government will announce more fiscal stimulus as the economic planning agency's emergency briefing raised skepticism over the sufficiency of previously planned measures.

The pan European Stoxx 600 climbed 0.66 percent. The U.K.'s FTSE 100 ended higher by 0.65 percent, Germany's DAX gained 0.99 percent, and France's CAC 40 ended 0.52 percent up.