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Stock Market Today - 5/25: Stocks Finish Higher, Bond Yields Slide, With Fed Minutes In Focus

Stocks finish higher Wednesday as the Federal Reserve releases minutes from its May meeting.

Updated at 4:15 pm EST

Stocks finished higher Wednesday as minutes from the Federal Reserve's May meeting suggest the central bank is set to hold its path of interest hikes.

The Dow Jones Industrial Average finished up 192 points, or 0.60%, to 32,121, while the S&P 500 gained 0.95% and the tech-focused Nasdaq gained 1.51%.

The Fed's inflation fight, which will likely deliver 50-basis point rate hikes at consecutive policy meetings between now and September, has pounded domestic stocks and slowed economic growth prospects in the world's biggest economy.

What it hasn't done, as yet, is blunt the pace of consumer price increases, which are accelerating at the fastest pace in four decades. That's largely as a result of influences beyond the Fed's control, such as Russia's war on Ukraine, China's Covid crisis and the knock-on disruptions they've caused to global supply chains.

That could give the Fed a reason to slow, or even pause, the pace of its tightening, although bets on a 50-basis point hike in both June and July remain well north of 90%, according to the CME Group's FedWatch.

Participants agreed that the economic outlook was highly uncertain and that policy decisions should be data dependent and focused on returning inflation to the Committee's 2% goal while sustaining strong labor market conditions," Minutes of the Fed's May 4 policy meeting indicated. "At present, participants judged that it was important to move expeditiously to a more neutral monetary policy stance."

"They also noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook," the minutes noted.

Atlanta Fed President Raphael Bostic said yesterday that he intended to "proceed carefully in tightening policy", while being mindful of non-financial impacts and avoiding any "reckless" policy decisions.

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European stocks were only modestly higher, despite a solid start, following a modest improvement in German consumer morale, based on a closely-watch GfK survey, and data showing its economy -- the region's largest -- avoided recession over the first three months of the year.

In the U.S., benchmark 10-year Treasury bond yields -- which move inversely to prices -- traded at a one-month low of 2.743% following Tuesday's shockingly poor new home sales figures and PMI data indicating slowdowns in both the manufacturing and services sector. 

The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was marked 0.30% higher at 102.16 in late New York trading.

Wendy's  (WEN) - Get Wendy's Company (The) Report shares rose 9.8% after activist investor Nelson Peltz said he was considering a takeover of the iconic restaurant chain.

Nvidia Corp  (NVDA) - Get NVIDIA Corporation Report climbed 5.1% ahead of the chipmaker's first quarter earnings report after the closing bell.

The Street is looking for a solid bottom line of $1.29 per share, a 40% increase from last year, as chip prices march higher amid the supply chain snarls linked to China's Covid crisis. 

Revenues are expected to meet Nvidia's February guidance of $8.1 billion, plus or minus 2%, although slowing sales of its 'CMP' chips, which are used by cryptocurrency miners, could shave some of that tally as the sector continues to struggle.

Nordstrom  (JWN) - Get Nordstrom Inc. Report shares rose 14% after the mall-focused retailer defied the sector's recent gloom with a narrower-than-expected first loss paired with a boost to its full-year profit forecast.