US: Stocks gain after Federal Reserve minutes stay tough on inflation

US STOCKS finished higher on Wednesday, rising after Federal Reserve minutes maintained a tough line on inflation, while a services industry survey showed slowing but steady growth.

Fed policy makers reiterated their willingness to continue raising interest rates to tamp down price pressures in minutes recounting the central bank’s big interest rate hike in June.

Market watchers said investors were pleased to see the tough line on inflation, although Briefing.com analyst Patrick O’Hare noted the Fed’s stance was a restatement of its posture in recent statements.

“It’s more because it had been such a terrible first half of the year,” O’Hare said of Wednesday’s gains. “We got so oversold in the month of June. The market is just looking for a ray of hope.”

The Dow Jones Industrial Average added 0.2 per cent at 31,037.68. The broad-based S&P 500 gained 0.4 per cent to 3,845.08, while the tech-rich Nasdaq Composite Index also climbed 0.4 per cent to 11,361.85.

Stocks had been in the red prior to the minutes, after the Institute for Survey Management’s services index fell 0.6 percentage points to 55.3 per cent.

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Although business activity increased, new orders and deliveries decreased due to high inflation and ongoing global supply chain snarls, the ISM said.

Among individual companies, Rivian Automotive surged 10.4 per cent as it released production and delivery figures that kept the electric truck maker on track to hit its 25,000 annual target.

DoorDash tumbled 7.4 per cent, and Uber Technologies dropped 4.5 per cent after Just Eat Takeaway announced a new venture in which Amazon Prime customers in the United States will be able to receive a year of free restaurant delivery on the rival Grubhub+ service. AFP