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Stock market news live updates: Stocks rebound to close higher as investors digest hawkish Fed minutes

Alexandra Semenova

·Reporter

Fri, April 8, 2022, 5:04 AM·9 min read

In this article:

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U.S. stocks bounced back in the final hour of trading Thursday to cap a choppy session in the green as investors continued to mull a hawkish readout of minutes from the Federal Reserve’s last policy-setting meeting that suggested more aggressive monetary tightening is underway.

[Click here to read how markets are trading Friday, April 8]

The S&P 500 pared losses to rise 0.4%, and the Dow Jones Industrial Average was up roughly 0.3% after tumbling 300 points in intraday trading. The Nasdaq Composite recovered from a drop of more than 1% to close just above breakeven. The tech-heavy index, which began the week with a 2% pop, previously ended two consecutive sessions 2.2% lower. The 10-year Treasury yield climbed again to yield 2.652% — the highest level in three years.

Conversations detailed in the March 15-16 Fed meeting minutes released Wednesday suggested policymakers will soon begin to unwind the central bank’s $9 trillion balance sheet, including $4 trillion in asset purchases amassed to calm markets after the pandemic hit in early 2020. The minutes also indicated many participants in the Federal Open Market Committee (FOMC) “would have preferred a 50 basis point increase" in benchmark interest rates in March, when the Fed raised rates for the first time since 2018.

"When those minutes were actually released this afternoon, I think what you really saw was the solidification around the news that the Fed is very intent on combating inflation," U.S. Bank senior vice president Lisa Erickson told Yahoo Finance Live.

Economists at Bank of America, which recently modified its Fed call to include 50 basis point rate hikes in June and July, said in a Wednesday note the newly released minutes show enough evidence to tip the scales towards a double bump increase in May.

“The reality is we are in uncharted waters here and the Fed has a difficult task in unwinding the tremendous monetary support over the past couple years,” Allianz Investment Management senior investment strategist Charlie Ripley said in a note. “Against this backdrop, it is highly conceivable that uncertainty in the path of monetary policy will remain embedded in markets and that is exactly what we have been witnessing with the recent moves in interest rates and risk assets.”