Wall Street ends lower, gold jumps as Fed minutes reveal cautious policy approach

As today’s expert put it, “We’ve had a very sharp rally, and some profit-taking was probably overdue,” is as good as any explanation for the modest downturn all three indexes took today triggered in large part by cautious Fed minutes that confirmed the “higher-for-longer” scenario.  But the tumbling sales of existing homes, the lowest in 13 years, due to rising mortgage rates plus falling Treasury yields was supporting news on the inflation front. Volume remained considerably below average at 9.4 billion.  

Wall Street ends lower, gold jumps as Fed minutes reveal cautious policy approach

By Stephen Culp

Tue November 21, 2023 4:34 PM

DJ: 35,151.04  +203.76       NAS: 14,284.53  +159.05       S&P: 4,547.38  +33.36     11/20

DJ: 35,088.29   -62.75         NAS: 14,199.98  -84.55          S&P: 4,538.19  -9.19        11/21

NEW YORK, Nov 21 (Reuters) - U.S. stocks dipped on Tuesday and gold touched a two-week high while minutes from the Federal Reserve's most recent meeting showed the central bank is "in a position to proceed carefully."  All three major U.S. stock indexes ended slightly lower, with the tech-laden Nasdaq down the most ahead of Nvidia's (NVDA.O) results after the closing bell. The chipmaker forecast fourth-quarter revenue above estimates. Its shares were last slightly lower in extended trading.  The S&P 500 and the Nasdaq both snapped five-day winning streaks.  "We've had a very sharp rally, and some profit-taking was probably overdue," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. "A lot of traders want to take money off the table on a day like today ahead of the holiday." 

The Fed's minutes from its Oct. 31-Nov. 1 meeting showed the policy makers wrestling with conflicting signals and agreeing to continue with caution after voting to leave the Fed funds target rate at 5.25%-5.50%.  The minutes "confirm the statement from the last meeting and (Chairman Jerome) Powell's news conference afterward that the Fed is likely on hold for now," Ghriskey added. "If inflation re-accelerated they would likely have to act, but absent that, we're in a period of higher-for-longer rates and we take them at their word for that."  On the economic front, existing home sales tumbled to their lowest level in more than 13 years as rising mortgage rates and low inventories kept potential homebuyers on the sidelines. 

The Dow Jones Industrial Average (.DJI) fell 62.75 points, or 0.18%, to 35,088.29, the S&P 500 (.SPX) lost 9.19 points, or 0.20%, to 4,538.19 and the Nasdaq Composite (.IXIC) dropped 84.55 points, or 0.59%, to 14,199.98.  European shares closed slightly lower as banking stocks weighed ahead of the Fed minutes release.  The pan-European STOXX 600 index (.STOXX) lost 0.09% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.18%.  Emerging market stocks rose 0.25%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.42% higher, while Japan's Nikkei (.N225) lost 0.10%. 

Benchmark Treasury yields inched lower after a poorly received auction of 10-year inflation protected notes and the Fed minutes failed to reveal any new policy decisions.  Benchmark 10-year notes last rose 3/32 in price to yield 4.4101%, from 4.422% late on Monday.  The 30-year bond last rose 6/32 in price to yield 4.5643%, from 4.575% late on Monday.

Per the CBOE, volume came in at 9.4 billion, remaining considerably below average.