Stocks closed slightly higher in choppy trading Wednesday as Wall Street tried to interpret a release from the Federal Reserve which summarized its crucial meeting last month where the central bank indicated it would be patient on future rate hikes.
The Nasdaq Composite ended the day just above the flatline at 7,489.07 to notch its eight consecutive gain. The Dow Jones Industrial Average rose 63.12 points to 25,954.44. The S&P 500 closed 0.2 percent higher at 2,784.70. Equities gyrated following the Fed's release, with the S&P 500 and Dow reaching their highs of the day.
The Fed meeting minutes highlighted downside risks to the economy from its January meeting, including "the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions."
"Slowing growth has been a low humming chorus in the market for a while now and today we're hearing the Fed join in, which is a significant departure from the goldilocks rhetoric we've heard from them in the past," said Mike Loewengart, vice president of investment strategy at E-Trade. "That said, slow growth does not mean recession."
However, some equity investors may be encouraged by language in the minutes regarding its hotly debated balance sheet normalization. Bulls want the Fed to stop reducing its balance sheet, arguing that practice is a de facto tightening of monetary conditions. The central bank did hint in the minutes that it may end its balance-sheet normalization this year.
"Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year," the minutes stated. 'Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet."