U.S. Stocks Close Mixed Following Late-Day Recovery

Stocks spent most of Wednesday’s session in the red but staged a notable recovery attempt going into the close of trading. The Dow and the S&P 500 bounced well off their worst levels and into positive territory, although the tech-heavy Nasdaq still closed lower for the third straight session.

While the Nasdaq fell 49.91 points or 0.3 percent to 15,580.90, the Dow inched up 48.44 points or 0.1 percent to 38,612.24 and the S&P 500 crept up 6.29 points or 0.1 percent to 4,981.80.

Concerns about the outlook for interest rates weighed on the markets for much of the session, with the major averages falling to their worst levels after the minutes of the Federal Reserve’s latest monetary policy meeting revealed most officials remain wary of cutting interest rates “too quickly.”

The minutes of the late-January meeting said participants acknowledged risks to achieving the Fed’s employment and inflation goals were moving into better balance, but they remained highly attentive to inflation risks.

“In particular, they saw upside risks to inflation as having diminished but noted that inflation was still above the Committee’s longer-run goal,” the Fed said.

Most participants subsequently highlighted the risks of moving “too quickly” to lower interest rates and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to the Fed’s 2 percent target.

However, the Fed said a couple of participants pointed to downside risks to the economy associated with maintaining an overly restrictive stance for too long.

The late-day recovery may have reflected expectations the Fed will still eventually cut interest rates as well as optimism ahead of the release of fourth quarter results from Nvidia (NVDA) after the close of today’s trading.

Shares of Nvidia have skyrocketed this year amid optimism about demand for its AI chips, but traders are wary of whether its results will support further upside.

“While equities have run out of steam in…