Stocks gain ground on Wall Street ahead of US holidays.

Stocks closed broadly higher on Wall Street on Wednesday after minutes from the Federal Reserve’s most recent policy meeting showed central bank officials agreed that raising smaller rates would likely be appropriate “soon.”

The S&P 500 rose 0.6%, while the Dow Jones industrial average gained 0.3%. The Nasdaq Composite closed up 1%.

Long-term Treasury yields fell. The 10-year Treasury yield, which influences mortgage rates, fell to 3.69% from 3.76%.

At the November 1-2 meeting, Fed officials expressed uncertainty about how long it might take to raise rates to slow the economy enough to control inflation. In a subsequent press conference, Chairman Jerome Powell stressed that the Fed was not even close to declaring victory in its fight to curb high inflation. Other Fed officials in the weeks after the meeting signaled that further hikes would still be needed.

Still, a “substantial majority” of officials felt that smaller rate increases would “probably soon be appropriate,” according to the minutes of their meeting.

That line of thinking is likely to stoke optimism among investors who have been trying to gauge how soon central bank officials would start to scale back the aggressive pace of rate hikes in the Fed’s drive to reduce inflation.

“Markets continue to hold gains as the Fed minutes reinforce what Fed speakers have been telegraphing since the November 1-2 meeting,” said Quincy Krosby, chief global strategist at LPL Financial. “It’s that the Fed is going down in terms of rates, from the aggressive campaign of 75 basis points to 50 basis points most likely at the December 13-14 meeting.”

The central bank’s benchmark rate currently stands at 3.75-4%, up from almost zero in March. He warned that he may ultimately have to raise rates to previously unanticipated levels to cool the highest inflation in decades.

Wall Street has been closely watching the latest economic and inflation data for any signs that might allow the Federal Reserve to moderate future rate hikes. Investors are worried that the Fed could slow down economic growth too much and trigger a recession.

Consumer spending and the labor market have so far remained strong points in the economy. That has helped as a bulwark against a recession, but it also means the Fed may have to remain aggressive.

The number of Americans filing for unemployment benefits rose last week to the highest level since August, but the number remains low by historical standards. A November survey by the University of Michigan shows that consumer confidence has grown since October more than economists had expected.

Technology stocks and some large retailers helped drive a large chunk of the gains in the benchmark S&P 500 index on Wednesday. Chipmaker Nvidia rose 3% and Target rose 3.5%.

Farm equipment maker Deere gained 5% after reporting stronger financial results than analysts expected.

Homebuilders rose sharply after a government report showed US new home sales rose more than expected in October. Lennar gained 1.6% and DR Horton rose 2.2%.

Crude prices fell 3.7%, weighing on energy stocks. Hess fell 2.2%.

In total, the S&P 500 rose 23.68 points to 4,027.26. The Dow gained 95.96 points to 34,194.06. The Nasdaq rose 110.91 points to 11,285.32.

The Russell 2000 Index of Smaller Companies rose, adding 3.08 points, or 0.2%, to close at 1,863.52.

European markets closed mostly higher and Asian markets closed overnight.

Trading has been shaky during the holiday-shortened week, but the major indices are on track for weekly gains. US markets will be closed on Thursday for Thanksgiving and close early on Friday.

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