Investing.com– The S&P 500 closed slightly higher Wednesday as tech stocks cut some losses after Treasury yields steadied even as the minutes from the Federal Reserve’s December meeting signaled a slower pace of rate cuts ahead.
At 4:00 p.m. ET (21:00 GMT), the rose 94 points, or 0.2%, the index added 0.1%, and the slipped 0.1%.
Fed minutes signal slower pace of rate cuts ahead
Federal Reserve policymakers were in favor of slowing the pace of rate cuts on concerns about stalling disinflation, the minutes of the Federal Reserve’s Dec. 17-18 meeting showed on Wednesday.
After the December meeting, the “Committee would likely slow the pace of further adjustments to the stance of monetary policy,” the minutes showed. The more cautious sentiment among Fed members on further rate cuts was prompted by slower progress on curbing the pace of inflation toward the 2% target.
Treasury yields steadied, however, following a spike on Tuesday after Fed governor Christopher Waller backed further rate cuts amid expectations that inflation will likely continue to fall.
Tech cuts some losses to end above session lows
Tech stocks closed above session lows as Treasury yields stabilized after surging above multi-month highs a day earlier.
Most of the megacap tech stocks closed in the red but above session lows, with Apple Inc (NASDAQ:), Alphabet Inc Class C (NASDAQ:), Meta Platforms Inc (NASDAQ:), trading in the red, while NVIDIA Corporation (NASDAQ:) hovered near the flatline.
Palantir Technologies Inc (NASDAQ:), meanwhile, fell further on Wednesday, as concerns about frothy valuations remain a concern. The stock has slumped about 16% since hitting an all-time high last month.
Employment data comes in strong ahead of nonfarm payrolls
The number of Americans filing for first-time unemployment benefits unexpectedly edged down last week, touching the lowest level since February, in a sign of strength in the labor market.
Initial claims for state jobless aid slipped to 201,000 during the week ended on January 4, while the four-week moving average, which aims to account for volatility in the weekly returns, decreased to 213,000. It had previously stood at 223,250.
Elsewhere, private payrolls increased by 122,000 jobs last month, after advancing by 146,000 in November, the ADP National Employment Report showed.
A raft of economic figures earlier this week also pointed to an unexpected increase in job openings and sticky inflation. Taken together, the readings — which come ahead of the all-important monthly US employment report later this week — bolstered bets that the Federal Reserve will not be in a rush to roll out further possible interest rate reductions in 2025.
Investors will also be keeping tabs on a speech from Fed Governor Christopher Waller on Wednesday, as well as minutes from the rate-setting Federal Open Market Committee’s latest meeting, for any more indications on the central bank’s policy trajectory.
Exxon Mobil flags hit to earnings
In the corporate sector, Exxon Mobil (NYSE:) fell 1.7% after the oil major warned that a decline in oil refining profits, along with weak returns from across its operations, would dent its fourth-quarter income by around $1.75 billion versus the prior three-month period.
London-based rival Shell (NYSE:) stock fell 1.9% after it flagged that it will book a charge of $1.3 billion in the fourth quarter related to permits in Germany and the US. It added in an update that earnings from its integrated gas division will also be “significantly lower” than the third quarter.
(Peter Nurse, Ambar Warrick contributed to this article.)
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