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FOMC Minutes sent Wall Street deep into the red

  • Fears of rising cost trimming benefits of tax cuts sent indexes lower post-FOMC.
  • 10-year note yield peaked at 2.96%, 2-year note one at 2.28%, fresh multi-year highs.

US indexes were trading up for the day, posting solid intraday gains as market's mood kept improving this Wednesday, but turned abruptly lower following the  release of the latest FOMC's Meeting Minutes, which indicate confidence in the economic growth and the increased likelihood of more rate hikes ahead, despite also showing that policymakers are concerned about lagging inflation.

US Treasury yields and the American dollar initially fell with the headlines, but quickly changed course, triggering equities u-turn. The 10-year note yield hit 2.96% to finally close at 2.94%, while for the 2-year note, yields reached 2.28% its highest level in almost a decade.

The Dow heads into the Asian opening at its lowest since last Wednesday, having ended the day at 24,797.78, down 167 points. The Nasdaq Composite lost 16 points, to 7,218.23, while the S&P finished at 2,701.33 after shedding 0.55%.

While some key levels have held for now, as the Dow remains above the 61.8% retracement of the previous week's slump, the risk is back toward the downside as fears of rising costs was in the first place what triggered Wall Street's collapse earlier this month. 

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Valeria Bednarik

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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