U.S. stocks edged higher, steadying following Tuesday’s decline as investors weighed data showing moderate inflation and the latest signs of caution from global central banks. Patient signals from the Federal Reserve regarding interest-rate increases and its balance-sheet runoff program have lifted stocks in recent weeks. Although economic growth is slowing, some analysts say it is still sturdy enough to support corporate profitability without stoking fears of higher inflation that could lead to tighter monetary policy. Minutes from the Fed’s last meeting showed officials signaled greater conviction that they wouldn’t need to change interest rates this year. Figures early in the day showed the consumer-price index rose less than economists had expected in March when excluding the volatile food and energy categories, the latest sign underlying price pressures remain contained. Higher energy prices did help push up overall inflation last month. Meanwhile, the European Central Bank left its policies unchanged as it gauges the impact of its latest stimulus measures designed to spur growth in the lagging eurozone economy. Despite an expected slowdown in corporate profits this year, some analysts say recent shifts by central banks have driven the rally in stocks around the world and commodities early in the year. The S&P 500 inched up 10.01 points, or 0.3%, to 2888.21. The index snapped an eight-session winning streak Tuesday but is still up 15% for the year and 1.5% below last year’s record. The Dow Jones Industrial Average closed up 6.58 points, or less than 0.1%, at 26157.16. The tech-laden Nasdaq Composite rose 54.97 points, or 0.7%, to 7964.24.
In other commodity news, gold climbed as concerns over an economic slowdown helped prices tally a fourth straight session gain. The European Central Bank remained downbeat on the economic outlook for the eurozone. It also made no changes to monetary policy, and repeated plans to hold key interest rates unchanged at least through the end of the year. The news followed the International Monetary Fund’s reduction Tuesday to its outlook for global economic growth–the third cut in six months. June gold on Comex climbed by $5.60, or 0.4%, to settle at $1,313.90 an ounce, the highest settlement for a most-active contract since March 26, according to FactSet data. The precious metal scored a fourth straight advance, marking the commodity’s longest win streak since a five-session rise ended Jan. 31. In electronic trading Wednesday after the settlement, prices moved lower following the release of the minutes of the Federal Open Market Committee’s March monetary policy meeting. The minutes showed that the Federal Reserve’s decision in March to cease raising interest rates this year was driven by unease over the U.S. and global economies and surprisingly subdued inflation. In electronic trading shortly after the release, June gold was at $1,311.90 an ounce. Gold is sometimes viewed as a hedge against rising inflation, however that economic measure has been sluggish inside and outside the U.S. Elsewhere on Comex, May silver edged up by 0.2%, to $15.244 an ounce and May copper fell 0.3% at $2.926 a pound. July platinum settled 1.1% higher at $908.90 an ounce, while June palladium shed less than 0.05% to end at $1,363.20 an ounce.
Iron Ore: 91.53s + 0.09 (May Contract)
Oil prices rose to their highest in more than five months as a sharp decline in
Venezuelan oil production more than offset a weekly report showing another increase in U.S. inventories of crude oil. West Texas Intermediate futures, the U.S. oil benchmark, ended 1% higher at $64.61 a barrel on the New York Mercantile Exchange, the highest since Oct. 31. Brent crude, the global oil benchmark, rose 1.6% to $71.73 a barrel on London’s Intercontinental Exchange, the highest since Nov. 7. Oil prices are up 42% so far this year and rose Wednesday after the Organization of the Petroleum Exporting Countries’ monthly report showed the group’s output fell significantly last month, led by declines from Venezuela and Saudi Arabia. The data showed overall OPEC crude production fell in March by 534,000 barrels a day month-on-month to average 30.02 million barrels a day, confirming anew that the group is complying with its December agreement to reduce output. Saudi Arabia cut output by 324,000 barrels a day in March, to 9.8 million barrels a day, while OPEC-member Venezuela, which has been hit by U.S. sanctions, electricity outages and a collapsing economy saw output fall by 289,000 barrels a day, to just 732,000 barrels a day, based on “secondary sources,” OPEC said. Venezuela was producing
2.4 million barrels a day as recently as 2015.
The U.S. dollar fell after a report showed consumer prices rose less than expected last month, further solidifying expectations that the Federal Reserve will remain on hold. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, declined for a third consecutive session, falling 0.2% to 89.88. The dollar slipped after Labor Department said Wednesday that the consumer-price index for so-called core prices, which excludes volatile food and energy prices, rose just 0.15% from February. A broader measure of what Americans pay for household items such as spatulas and services such as pet grooming, increased 0.41% in March from the prior month. Economists surveyed by The Wall Street Journal expected overall prices to increase 0.3% in March and prices excluding food and energy to edge up 0.2%. The index has fallen 0.7% since reaching its 2019 on March 7. Because the pace of price gains set by the Fed of an annual inflation rate of 2%, the data is “too close to the target to have much impact” on the central bank’s interest-rate policy, said Daniel Katzive, head of currency strategy in North America at BNP Paribas. Fed officials have said that they expect to hold interest rates steady at their current range of 2.25% to 2.5% for the remainder of the year unless the economy sees a sharp rise in inflation. The dollar remained lower late Wednesday after the Fed released minutes of its March meeting. At that gathering, officials saw little reason to continue raising rates due to greater risks to the U.S. economy from the global growth slowdown and muted inflation readings that took more officials by surprise. Investors in the foreign exchange market pay close attention to central bank policies surrounding interest rates because higher rates typically attract people to a currency.