US stocks were flat on Wednesday after minutes from the Federal Reserve’s April meeting showed that a June interest-rate increase was a possibility.
Bank stocks rose though on expectations that higher interest rates would widen the spread between what banks charge on loans and what they pay on deposits and hence boost earnings.
Many investors were apparently surprised by the prospect of faster rate rises. The yield on the US 10-year Treasury note jumped to 1.882 percent on Wednesday from 1.759 percent on Tuesday, the largest one-day advance since December.
“I thought it was going to be one or two rate increases this year,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “Now the door has been opened to two or three,” he added.