Stock market news live updates: Stocks close higher after volatile session

·Reporter

Thu, January 5, 2023, 6:06 AM GMT+9·5 min read

U.S. stocks rose Wednesday after back-and-forth trading as investors weighed a batch of economic data and minutes from the Federal Reserve’s December policy meeting.

The S&P 500 (^GSPC) gained 0.8% in a volatile session, while the Dow Jones Industrial Average (^DJI) added 130 points, or 0.4%. The technology-heavy Nasdaq Composite (^IXIC) advanced 0.7%.

A readout of discussions from the U.S. central bank's December gathering indicated Fed officials were reticent an "unwarranted" easing of financial conditions could backtrack their efforts to restore price stability, while also acknowledging the need for more policy flexibility.

“Participants noted that, because monetary policy worked importantly through financial markets, an unwarranted easing in financial conditions, especially if driven by a misperception by the public of the committee’s reaction function, would complicate the committee’s effort to restore price stability,” minutes of the Fed's December 13-14 meeting stated.

Policymakers set to convene again January 31-February 1 and expected to deliver the first rate increase of 2023 and eighth of the current hiking cycle at the conclusion of discussions. Last month, the Fed raised interest rates by 50 basis points, bringing total increases to its benchmark policy rate to 4.25% in 2022.

"The Fed minutes are a good reminder for investors to expect rates to remain high throughout all of 2023," Mike Loewengart, head of model portfolio construction at Morgan Stanley's Global Investment Office, said in emailed comments. "Bottom line is that even though we flipped the calendar, the market headwinds from last year remain."

Earlier in the day, the latest Job Openings and Labor Turnover Survey, or JOLTS, showed 10.5 million job vacancies in November — more than forecast — pointing to continued labor market momentum despite monetary tightening by the Fed. Meanwhile, the ISM Manufacturing PMI fell for a second consecutive month to 48.4 in December from 49 in November, the biggest decline since May 2020.