Stocks ended lower Wednesday after the Federal Reserve, in minutes from its July meeting, said the coronavirus pandemic would weigh heavily" on U.S. economic activity and the jobs market.
Fed officials “agreed that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term.”
The central bank said it expected to maintain rates between a 0% and 0.25% until it's “confident that the economy had weathered recent events and was on track to achieve the committee’s maximum employment and price stability goals.”
The Dow Jones Industrial Average fell 85 points, or 0.3%, to end at 27,693. The S&P 500 fell 0.44% and the Nasdaq eased 0.57%.
Earlier in the session, the broad S&P 500 index had set an intraday record high of 3,399 after finishing Tuesday's session at an all-time high.
Apple (AAPL) - Get Report became the first U.S. company with a $2 trillion market capitalization. The stock reached a market cap of $1 trillion just two years ago. It has risen 59% so far in 2020.
The S&P 500 has rallied 51.5% since March as aid from the Federal Reserve and economic stimulus from Congress fueled the remarkable rebound.
"Even the most optimistic people in March were unlikely to have expected the market to recoup all of its losses in less than five months, however, the massive amounts of liquidity that the Federal Reserve has injected into the system is as big reason for the stunning recovery that we have just witnessed," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in Charlotte.
Zaccarelli said the stock market still faces "numerous headwinds" such as a potential second wave of coronavirus infections but "what is rarely talked about are all of the factors which could drive the market higher, such as: another government stimulus package, trillions of dollars in infrastructure spending in 2021 and beyond, low interest rates for an extended period of time and continued Federal Reserve quantitative easing.
Democratic and Republican leaders are looking for ways to bridge the wide gap in their stalled coronavirus stimulus negotiations.
House Speaker Nancy Pelosi suggested Democrats could make more cuts to their $3.5 trillion relief proposal.
Target (TGT) - Get Report rose nearly 12% after posting much stronger-than-expected second-quarter earnings. Digital sales rose nearly 200% from last year as shoppers flocked to the few stores that remained opened throughout the coronavirus pandemic.
Target said comparable-store sales growth of 24.3% in the second quarter was the strongest it has ever reported.
Same-store sales at the home-improvement retailer jumped 34.2%, well above forecasts of 16.3%, and U.S. same-store sales soared 35.1%. The stock rose 0.27%.