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US markets settle in red after Fed minutes

18 Aug 2022 Evaluate

The US markets settled in red on Wednesday with Nasdaq ending lower of over one percent after the Federal Reserve released the minutes of its latest monetary policy meeting. The Fed minutes reaffirmed the central bank's plans to continue raising interest rates in an effort to return inflation to its 2 percent objective. The minutes did not provide specific guidance regarding the pace of future rate hikes, noting that the extent of future policy tightening would depend on the implications of incoming data for the economic outlook and risks to the outlook. The Fed did reveal that meeting participants believed it would be necessary to move to a restrictive stance of policy due to inflation remaining well above the Fed's objective.

Traders were also reacting to a Commerce Department report showing US retail sales came in flat in July amid pullbacks in gas station and auto sales. The Commerce Department said retail sales were virtually unchanged in July after climbing by a downwardly revised 0.8 percent in June. Street had expected retail sales to inch up by 0.1 percent compared to the 1.0 percent jump originally reported for the previous month. Excluding gas station and auto sales, however, retail sales rose by 0.7 percent in July, matching the increase seen in the previous month. On the sectoral front, Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.5 percent. Semiconductor stocks also saw significant weakness on the day, resulting in a 2.5 percent slump by the Philadelphia Semiconductor Index.

Dow Jones Industrial Average fell 171.69 points or 0.5 percent to 33,980.32, Nasdaq lost 164.43 points or 1.25 percent to 12,938.12 and S&P 500 was down by 31.16 points or 0.72 percent to 4,274.04.

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