U.S. markets rebounded following the release Wednesday of the U.S. Federal Reserve’s policy meeting minutes indicating concern over weakness in the global economy and less inflationary pressure from a stronger dollar. But for time being, investors are satisfied that the economic situation is tenuous enough to keep U.S. interest rates down.
The S&P 500 was up more than 1.75 percent Wednesday afternoon in New York, to 1968.89, recouping its losses from the first two days of trading this week. The Dow Jones Industrial Average gained nearly 275 points, to 16,994.22, nearly recovering what was lost since Monday ahead of the Fed meeting.
The meeting came a day after the International Monetary Fund released a downbeat report that developed economies aren’t stable enough to carry the global economic recovery, but Wednesday’s news gave investors enough to get back into the stock market.
“We’re starting to see investors who felt that this market was going to continue its selloff ... jump back in now,” Jonathan Corpina, senior managing partner at New York brokerage Meridian Equity Partners, told the Wall Street Journal.
The U.S. central bank’s message was interpreted by investors to mean it would wait longer to begin raising the benchmark interest rate that’s currently pegged at 0 to 0.25 percent. Because the U.S. economy is driven by the consumption of goods and consumer borrowing, there are concerns of what will happen when rates begin to raise again.