US close: Stocks close slightly higher following mixed CPI reading and Fed minutes

US stocks recorded some modest gains on Wednesday as investors digested a mixed reading on inflation pressures in the world's largest economy, as well as updates from both the European and US central banks.

At the close, the Dow Jones Industrial Average was up 0.03% at 26,157.16, while the S&P 500 had gained 0.35% to 2,888.21 and the Nasdaq moved 0.70% higher to 7,964.24.

The Dow closed six points higher on Wednesday after all eyes were fixed across the pond early in the session, as the European Central Bank opted to make no changes to interest rates or other monetary policy measures, as expected, leaving its main lending rate at 0% and the deposit rate, which it pays on deposits parked overnight at the central bank, at negative 0.4%.

The ECB also reiterated its intention to keep rates at their current level until the end of 2019, at least.

TF Global Markets analyst Naeem Aslam said: "The ECB left the powder dry once again and the reason that the Euro is still in the positive territory is because a lot of bad news was already baked into the price.

"So, the ECB had to make significant changes to its monetary policy to push the euro lower (which we have not seen). All eyes will be on Draghi now, and if he adopts overly pessimistic tone, we could see the euro moving lower against the dollar."

In corporate news, Apple shares were 0.56% higher at the closing bell even after analysts at HSBC downgraded the tech behemoth to 'reduce', citing subdued returns.

HSBC said recent announcements on services had Apple putting money where its mouth is but noted that returns "could take some time to extract".

"Apple management should be credited on putting money where its mouth is: just a few months after changing disclosure and trying to encourage investors to focus on the future of services, the high profile event held on 25 March focused on four important launches in services that could help in transforming the company’s business model eventually.

"All in, adding the products segment equity value per share (USD85), Services segment value per share (USD63), the potential upside from New services offerings (USD7 per share) and the net cash (USD27 per share) leads us to overall value of cUSD182 per share – broadly in-line with our DCF assessment."

Boeing shares flew 1.06% lower after analysts at JP Morgan cut their target price on the aerospace giant from $450 to $430 in the wake of the ongoing issues around its 737 MAX 8 fleet.

Jean maker Levi Strauss shares jumped 3.98% after the group swung to a profit in its first post-IPO quarterly report, while Delta picked up 1.60% after topping analysts' estimates for its profits and revenue.

Lyft tumbled 10.58% to new low ahead of rival Uber's IPO filing.

Still to come this week, first-quarter earnings for US banking giants were slated for Friday, with JP Morgan Chase and Wells Fargo due to release their latest results.

On the data front, inflationary pressures in the States picked up last month, as energy prices extended their recent rebound, but the underlying picture was one of more subdued price increases.

According to the Department of Labor, in March the year-on-year rate of gain in headline consumer prices increased from 1.5% for February to 1.9% in March (consensus: 1.8%), as energy prices jumped by 3.5% from one month to the next.

At the 'core' level, however, CPI was held back by a 1.9% drop month-on-month in apparel prices, with the annual rate of gains dipping from 2.1% to 2.0% (consensus: 2.0%) - a 13-month low.

Commenting on Wednesday's figures, Andrew Hunter at Capital Economics said the dip in core CPI might be linked to Labor's decision to change how it calculates price changes in clothing, by incorporating real-time transactions from "a major retailer".

Hunter also reiterated his conviction that the Federal Reserve, the US central bank, would cut rates before 2019 was out.

"Overall, with unit labour cost growth slowing and the dollar’s prior appreciation putting downward pressure on imported goods prices, we continue to expect core inflation to remain close to its current muted level."

Elsewhere, the Federal Reserve's decision to cease raising interest rates last month was a result of fears surrounding the US and global economies and unexpectedly subdued inflation, according to minutes from the Fed's latest meeting.

Last month, the Fed shuttered its plans to continue raising a key short-term US interest, with chairman Jerome Powell opting to reiterate the Fed's stance that it would remain "patient", with the central bank’s closely watched "dot plot" - indicating that it would not increase interest rates in 2019.

"A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year," the minutes said.

"It was noteworthy that [inflation] had not shown greater signs of firming in response to strong labor market conditions and rising nominal wage growth, as well as to the short-term upward pressure o prices arising from tariff increases."