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U.S. stocks drop after Fed minutes, crypto fall

Published 05/19/2021, 07:18 AM
Updated 05/19/2021, 04:51 PM
© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021.  REUTERS/Brendan McDermid/File Photo

© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

By Echo Wang

(Reuters) - Wall Street's main indexes closed lower on Wednesday after minutes from an April Federal Reserve meeting showed participants agreed the U.S. economy remained far from the central bank's goals, with some considering discussions on tapering its bond buying program.

The S&P 500 added to losses after the release of the minutes revealed a number of Fed policymakers thought that if the economy continued rapid progress, it would become appropriate "at some point" in upcoming meetings to begin discussing a tapering of the Fed's monthly purchases of government bonds, a policy designed to keep long-term interest rates low.

"There continues to be a view and a perspective from the participants, as well as the Fed staff that these inflationary pressures that are beginning to become evident will remain transitory in their view and will likely recede as we transition into 2022," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.

Strong inflation readings and signs of a worker shortage in recent weeks have fueled fears and roiled stock markets despite reassurances from Fed officials that the rise in prices would be temporary.

All three main indexes hit their session lows in morning trade after opening sharply lower, then partially recovered before the release of the Fed minutes pressured them anew.

The Dow Jones Industrial Average fell 164.62 points, or 0.48%, to 33,896.04, the S&P 500 lost 12.15 points, or 0.29%, to 4,115.68 and the Nasdaq Composite dropped 3.90 points, or 0.03%, to 13,299.74.

Volume on U.S. exchanges was 10.70 billion shares, compared with the 10.60 billion average for the full session over the last 20 trading days.

Contributing to a risk-off mood on Wednesday, Bitcoin and ether plunged in the wake of China's move to ban financial and payment institutions from providing cryptocurrency services.

The two main digital currencies fell as much as 30% and 45%, respectively, but they significantly stemmed their losses in afternoon trading after two of their biggest backers -- Tesla (NASDAQ:TSLA) Inc chief Elon Musk and Ark Invest's chief executive officer Cathie Wood -- reiterated their support for bitcoin.

Crypto-exchange operator Coinbase Global ,miners Riot Blockchain (NASDAQ:RIOT) and Marathon Digital Holdings saw their shares sharply decline on Wednesday.

© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021.  REUTERS/Brendan McDermid/File Photo

Declining issues outnumbered advancing ones on the NYSE by a 2.15-to-1 ratio; on Nasdaq, a 1.71-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and no new lows; the Nasdaq Composite recorded 34 new highs and 49 new lows.

Latest comments

Bitcoin will only be good at Chucke Cheese soon
China will block crypto... without China, adoption will shattered to pieces...
you cannot let your government becoming too big. or else it will become authoritarian such as China..
I don't think so... O think China has the right amount of authority... they will stop something right away that may cause harm... they don't wait around, they solve problems as they arises...
bitcoin finished
Betting on crypto on pure speculation and sentiment is a fools game.  "a fool and his  money is parted"
More intraday miracles for the laughingstock of the financial world.  Assume the proper position America.
Powell's day is coming. His God complex has put him at odds with the Father. The one who set this mathematical miracle in place. Severe correction is not far off.
We have been in a downtrend since february. Just waiting for the final crash. Bitcoin may be the black swan event.
Can't have a day in the criminal US Ponzi Scheme without a miraculous, intraday "recovery" of losses.  Unlike of course "rallies" which walk a tightrope, completely uninterrupted.  Fraudulent joke.
price increase is permanent as usd lose its value permently
minutes will be entire
what about the gold trading to day?
Going up fast!!
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