S&P 500, Nasdaq Close at New Highs as Investors Stay the Course

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The S&P 500 and Nasdaq Composite closed at new highs Wednesday and long-term bond yields held their declines after the Federal Reserve’s latest meeting minutes provided little reason for investors to change their bets.

The 

Dow Jones Industrial Average

 rose 104.42 points, or 0.3%, to 34,681.79, about 0.3% shy of a record. The 

S&P 500

 climbed 14.59 points, or 0.3%, to a new all-time high 4,358.13, and the 

Nasdaq Composite

advanced 1.42 points, less than 0.1%, to 14,665.06, also eking out a record. The 10-year Treasury yield was down 5 basis points, or hundredths of a percentage point, to 1.32%, its lowest point since mid-February.

Minutes of the latest Federal Open Market Committee showed a split: Some officials said they expected to start winding down bond purchases earlier than they previously thought, while others wanted to wait. That followed labor-market data showing that fewer workers quit their jobs in May, and that a projected increase in job openings wasn’t as large as expected.

“Today’s FOMC minutes revealed a substantial dispersion of opinions among Committee members, as it has become increasingly difficult to ignore the vast improvement in the domestic economic environment, as well as the better virus/vaccine-related conditions,” wrote Bob Miller, head of fundamental fixed income in the Americas for

BlackRock.

While stocks at or near records attracted some attention, the persistent declines in Treasury yields created a puzzle that has become a focus for Wall Street this week. The steepest slide has been in yields on long-dated Treasuries, with the 10-year yield down 10 basis points this week and the 30-year yield down 11 basis points.

Wednesday’s move in yields was driven primarily by the market pricing a lower rate of inflation. Bond markets now imply a 2.27% rate of inflation over the next decade, Bloomberg data show.

Even so, not all strategists are convinced that Treasury yields will stay low.

Wells Fargo

‘s Mike Schumacher wrote that the 10-year yield “has a good chance” of ending the year above 2%, driven by stronger growth and marginally tighter Fed policy.

Asian stocks finished mixed with China’s CSI 300 rising 1.1%, though technology shares such as Alibaba and Baidu remained under pressure amid a crackdown by the government on technology companies. Shares of U.S.-listed ride-sharing company Didi Global tumbled Tuesday after it was ordered to stop signing up new users and pull its app from online stores while it beefs up customer security.

Announcements of cybersecurity probes into other Chinese U.S.-listed companies sent shares of Full Truck Alliance and Kanzhun tumbling Tuesday.

The

Stoxx Europe 600 index

climbed 0.8%, even after Tuesday’s mostly weaker session on Wall Street. On Wednesday, the European Union lifted its growth expectations for 2021 and 2022, citing effective Covid-19 containment strategies and vaccination progress that has helped economies reopen.

Crude benchmarks extended declines from Tuesday after hitting levels last seen in 2014 following collapsed talks between the Organization of the Petroleum Exporting Countries and its allies over disagreements on increasing production. West Texas crude oil fell 1.6% and Brent crude declined 1.5%.

Didi Global

 (ticker: DIDI) has dropped 4.6% one day after shedding 20% after Chinese regulators ordered it deleted from that nation’s app stores. U.S. Sen. Marco Rubio was also calling out the company.

AMC Entertainment

 (AMC) has dropped 9.8% after dropping 3.9% on Tuesday. That sets it up for a fourth straight loss, which would be the longest losing streak since April.

Oasis Petroleum

 (OAS) rose 1% after getting upgraded to Outperform from Sector Perform at RBC Capital.

Boston Beer

 (SAM) climbed more than 3% after getting upgraded to Outperform from Neutral at Credit Suisse.

Write to Alexandra Scaggs at alexandra[email protected] and Ben Levisohn at [email protected]