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Wednesday's Bank Stocks: Fed minutes erase morning losses

The Federal Open Market Committee minutes reversed the downward momentum of stocks May 23.

The S&P 500 expanded 0.32% to 2,733.29, the Dow Jones Industrial Average added 0.21% to 24,886.81 and the Nasdaq Composite Index rose 0.64% to 7,425.96.

Most Federal Reserve officials think their next rate hike should come "soon" as inflation has finally come close to their 2% target, according to the minutes of their most recent meeting in May. If economic data does not show major surprises, the minutes show, most Fed officials think "it would likely soon be appropriate" for the Federal Open Market Committee to hike its benchmark federal funds rate again.

Investors interpreted the minutes to show that the Fed under Chairman Jerome Powell is "a little more dovish" than they had been anticipating, said Lou Brien, market strategist at DRW Trading Group.

"There had been at least a question going into it of how seriously they would take the idea of the 2% target on the inflation rate as symmetrical and they certainly did re-enforce that idea in the minutes," he said. "[Inflation] could be a little above 2% for some time without the Fed having to panic about it. Generally, Powell seems to be a very calm hand at the Fed."

JPMorgan Chase & Co. declined 0.46% to $112.49, Bank of America Corp. dropped 1.46% to $30.44 and Citigroup Inc. fell 1.18% to $70.24, though Wells Fargo & Co. grew 1.66% to $56.18.

McKinney, Texas-based Independent Bank Group Inc. dropped 4.56% to $74.25 after announcing it would acquire Denver-based Guaranty Bancorp in an all-stock transaction valued at about $1.0 billion. Guaranty grew 2.00% to $33.10.

Hilltop Holdings Inc. grew 1.03% to $23.60, Flagstar Bancorp Inc. rose 0.45% to $35.34 and National Bank Holdings Corp. added 0.34% to $38.64. Fifth Third Bancorp declined 2.16% to $31.20

S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.

Market prices and index values are current as of the time of publication and are subject to change.