By Stephen Culp
NEW YORK (Reuters) -U.S. stocks dipped on Tuesday and gold touched a two-week high while minutes from the Federal Reserve’s most recent meeting showed the central bank is “in a position to proceed carefully.”
All three major U.S. stock indexes were lower, with the tech-laden Nasdaq down the most as investors await chipmaker Nvidia Corp’s results after the closing bell.
The S&P 500 and the Nasdaq appeared set to snap their five-day winning streaks.
“We’ve had a very sharp rally, and some profit-taking was probably overdue,” said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. “A lot of traders want to take money off the table on a day like today ahead of the holiday.”
The Fed’s minutes from its Oct. 31-Nov. 1 meeting showed the policy makers wrestling with conflicting signals and agreed to continue with caution after voting to leave the Fed funds target rate at 5.25%-5.50%.
“(The minutes) confirm the statement from the last meeting and (Chairman Jerome) Powell’s news conference afterward that the Fed is likely on hold for now,” Ghriskey added.
“If inflation reaccelerated they would likely have to act, but absent that, we’re in a period of higher for longer rates and we take them at their word for that.”
On the economic front, existing home sales tumbled to their lowest level in more than 13 years as rising mortgage rates and low inventories kept potential homebuyers on the sidelines.
The Dow Jones Industrial Average fell 84.7 points, or 0.24%, to 35,066.34, the S&P 500 lost 10.5 points, or 0.23%, to 4,536.88 and the Nasdaq Composite dropped 87.66 points, or 0.61%, to 14,196.87.
European shares closed nominally lower as banking stocks weighed ahead of the Fed minutes release.
The pan-European STOXX 600 index lost 0.09% and MSCI’s gauge of stocks across the globe shed 0.18%.
Emerging market stocks rose 0.26%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.43% higher, while Japan’s Nikkei lost 0.10%.
Benchmark Treasury yields oscillated, reversing an initial dip after the TIPS auction, then holding steady in the wake of the Fed minutes release.
Benchmark 10-year notes last /32 in price to yield 4.4218%, from 4.422% late on Monday.
The 30-year bond last fell 6/32 in price to yield 4.586%, from 4.575% late on Monday.
The greenback inched higher against a basket of world currencies on growing expectations that the central bank will start cutting rates in early 2024.
The dollar index rose 0.14%, with the euro down 0.24% to $1.0912.
The Japanese yen strengthened 0.01% versus the greenback at 148.36 per dollar, while sterling was last trading at $1.2537, up 0.26% on the day.
Crude prices pared earlier losses to settle nearly flat as investors looked ahead to Sunday’s scheduled OPEC+ meeting.
U.S. crude dipped 0.08% to settle at $77.77 per barrel, while Brent settled at $82.45 per barrel, up 0.16% on the day.
Gold surged to a two-week high, and briefly broke through the $2,000 per ounce level on expectations that the Fed has reached the end of its tightening cycle.
“Gold’s been in a bit of a rally and part of that is geopolitical concerns and investors looking for a place to hide,” Ghriskey said.
Spot gold added 1.2% to $2,000.19 an ounce.
(Reporting by Stephen Culp; Additional reporting by Samuel Indyk and Ankur Banerjee in London; Editing by Sharon Singleton and Marguerita Choy)
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