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S&P 500 Ends at Record as Fed Minutes Show Debate on Timing of Tapering

Stocks close higher as minutes from the Federal Reserve's June meeting show the central bank discussed the appropriate time to begin pulling in economic support.

Stocks finished higher Wednesday, with the S&P 500 and the Nasdaq closing at records, after minutes from the Federal Reserve's meeting in June showed the central bank discussed the appropriate time to begin pulling back on its support for the recovering U.S. economy.

“The Committee’s standard of ‘substantial further progress’ was generally seen as not having yet been met, though participants expected progress to continue,” according to minutes from the Federal Open Market Committee meeting on June 15-16.

“Various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had
anticipated at previous meetings.”

The Dow Jones Industrial Average finished up 104 points, or 0.3%, to 34,681, the S&P 500 gained 0.34% and the Nasdaq advanced 0.01%. 

The S&P 500 and Nasdaq set all-time intraday highs during Wednesday's session.

The benchmark 10-year Treasury on Wednesday was at 1.32%, near lows established in February.

Investors were closely monitoring the release of the minutes from the central bank after the Fed caught markets off guard with its hawkish tilt last month.

At its meeting in mid-June, the Fed projected the possibility of two interest rate hikes by the end of 2023. A majority of Fed officials also viewed that inflation risks were weighted to the upside, up from five in March.

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The Fed reiterated at the meeting it would maintain its monthly asset purchases of $120 billion until “substantial further progress’ was made on its goals for inflation and employment.

"Given the lack of new news, the market is left to worry about tapering (interest rates lower, stocks higher) and investors will continue to closely watch each new economic data release for clues as to when the Fed will announce their tapering program," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

U.S. stocks finished mostly lower Tuesday with the S&P 500 snapping a seven-session winning streak, its longest since August. The tech-heavy Nasdaq, boosted by stocks such as Apple  (AAPL) - Get Report and  (AMZN) - Get Report, set a closing high.

Oil prices in the U.S. fell 1.79% to $72.06 a barrel Wednesday amid a breakdown of talks among OPEC+ producers.

Shares of  (AMZN) - Get Report extended gains Wednesday, finishing 0.6% higher. The stock closed at a record on Tuesday after the Defense Department decided to cancel a $10 billion cloud-computing contract it awarded to Microsoft  (MSFT) - Get Report over Amazon.

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U.S.-listed shares of Didi Global  (DIDI) - Get Report fell 4.6% after tumbling nearly 20% in the previous session as China cracked down on the ride-hailing giant.

Didi went public last week on the New York Stock Exchange.

Regulators in Beijing are planning rules changes that would allow them to block a Chinese company from listing overseas even if the unit selling shares is incorporated outside China, closing a loophole long-used by the country’s technology giants such as Alibaba  (BABA) - Get Report, Bloomberg reported, citing people familiar with the matter.