Stocks Tumble as Fed Minutes Signal Possible Further Rate Hikes


Stock losses increased in the final hours of Wednesday trading after minutes from the Federal Reserve revealed that “most” officials still see upside risks in inflation. The day was marked by a gloomy forecast from retail giant Target (TGT).

The Dow Jones Industrial Average (^DJI) was down roughly 0.5%, or 180 points, while the S&P 500 (^GSPC) was down nearly 0.8%. The tech-heavy Nasdaq Composite (IXIC) was down more than 1 percent for the second day in a row.

Target took center stage Wednesday morning as the retailer slashed its full-year profit expectations and issued a caution about economic malaise. The company stated that rising interest rates, and the uncertainty of student loan repayments, could impact its bottom line. Despite this, Target’s stock price jumped by more than 3 percent after it announced an increase in profit.

In the afternoon, minutes from the Fed’s meeting last month showed that the majority of officials still see inflation as an upside risk. A “couple” of officials did not want to increase rates in July. At that meeting, the central bank increased interest rates to their highest level since 2001.

Investors were looking for clues as to what the Fed might do next month at its meeting. CME Group’s FedWatch tool shows that nearly 90% of traders anticipate the bank will keep rates constant, a slight drop from before the release of the minutes.

In other economic news, July housing starts, including both single-family and multi-family homes, increased to a rate of 1.45 million units per annum, which is 5.9% more than a year earlier, according to Census Bureau data released Wednesday. This surpassed the expectations of economists surveyed by Bloomberg. Although, builder sentiment dropped for the first time in August, following seven consecutive months with increases.

Leading Yahoo Finance Trending tickers on Wednesday was Target (TGT), whose stock rose more than 2% following the release of better-than-expected quarterly results, including an improved gross margin and shrinking inventory. VinFast Auto (VFS), the EV automaker whose shares surged after its Nasdaq trading debut, fell by nearly 20%. Cava (CAVA) was up by more than 1% following the company’s first profitable quarter, with revenue increasing 62.4% from $105.3 to $171.1 million. Lastly, Coinbase (COIN) was nearly flat after the crypto exchange announced it had received regulatory approval for US retail customers to trade regulated crypto-futures in the next few months.

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