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Wall St. Steady Ahead of Fed Decision 09/16 09:48
Wall Street is holding steady Wednesday as it waits to hear from the Federal
Reserve, which traders expect will announce a hike to interest rates later in
the day to help get the nation's high inflation under control.
NEW YORK (AP) -- Wall Street is holding steady Wednesday as it waits to hear
from the Federal Reserve, which traders expect will announce a hike to interest
rates later in the day to help get the nation's high inflation under control.
The S&P 500 rose 0.2% was on track for just its second gain in the last
eight days. The Dow Jones Industrial Average was down 42 points, or 0.1%, as of
9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Stocks got help from some easing for oil prices and pressure from the bond
market. The price for a barrel of Brent crude, the international standard, fell
1.1% to $107.59. It got to nearly $110 earlier this week on worries that the
war with Iran will continue to clog the global flow of oil. .
That helped send the yield on the 10-year Treasury, which is the centerpiece
of the bond market and dictates where rates for mortgages and other loans go,
down to 4.97% from 5.00% late Tuesday. Earlier this week was the first time
since 2023 that the 10-year yield topped 5%.
Even with Wednesday's slight easing, the pressure remains high. Brent oil is
still well above its $72 price from before the war with Iran, when the 10-year
yield was at just 3.97%. Worries about inflation staying high are so strong
that Wall Street sees it as nearly a certainty that Fed officials will announce
their first hike to interest rates since 2023 later in the day.
That's the typical move for the Fed to combat inflation, and it works by
making it more expensive for everyone to borrow money, which slows the overall
economy and hopefully removes fuel for prices to rise further. It also tends to
undercut prices for stocks and other investments, though President Donald Trump
has been lobbying for lower interest rates instead of higher.
Inflation is a worldwide problem, and the European Central Bank hiked rates
across the Atlantic last week to help diminish it.
Traders are still betting on a slight chance the Fed may hold off on raising
rates. If it does, the market could swing because investors may see it as a
sign that the Fed is less committed to getting inflation lower.
Fed officials will also release forecasts for where they see interest rates
heading in upcoming years, providing another opportunity to inject uncertainty
into the market.
A report on Wednesday morning showing that shoppers spent much more at U.S.
retailers last month than economists expected could help embolden the Fed. It
could be a signal that the economy remains strong enough to withstand higher
rates, though the growth could also simply show that shoppers are having to
spend more because of higher prices.
On Wall Street, stocks in the artificial-intelligence industry held steadier
following their worldwide slide earlier in the week, after leaders of the AI
industry called for a slowdown in development to address safety issues for
humanity.
Nvidia rose 0.8%, and Advanced Micro Devices climbed 2.6%.
They helped offset a drop of 10.5% for J.B. Hunt Transport Services. Its
chief financial officer told a conference of analysts late Wednesday that it's
facing higher costs and expects its earnings to drop from the second quarter to
the third.
In stock markets abroad, indexes rose across much of Europe and Asia. South
Korea's Kospi climbed 1.4% for one of the world's biggest gains.
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