Wall Street stagnates but trade choppy ahead of Fed rate meeting

Wall Street stagnates but trade choppy ahead of Fed rate meeting

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  • All eyes on the Fed’s policy decision on Wednesday
  • Traders price in a small chance of a 100 bps rate hike
  • Take Two’s GTA VI Gameplay Footage Leaked Online
  • Indices all down 0.05% to 0.06%

Sep 19 (Reuters) – Wall Street’s major indexes were flat early Monday afternoon amid choppy trading, rebounding as investors waited to see how aggressive the Federal Reserve would be this week with its hike interest rates.

Even more than the war in Ukraine or corporate earnings, US central bank actions are boosting market sentiment as traders try to position themselves for a rising interest rate environment.

The S&P 500 (.SPX) and Nasdaq (.IXIC) posted their worst weekly percentage decline since June on Friday as markets fully priced in a rate hike of at least 75 basis points by the end of the month. Fed policy meeting September 20-21. , with fed funds futures showing a 15% chance of a whopping 100 bps rise.

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Surprisingly warm August inflation data last week also sparked bets on more rate hikes going forward, with the US federal funds terminal rate now at 4.46%.

“The path of least resistance is still down. Trend followers will keep trying to sell every chance they get until we start to see some clarity (on the Fed and inflation) “said Joe Saluzzi, co-head of equity trading. at Themis Trading LLC.

“We haven’t seen widespread panic selling or anything like that in the year. It’s a low volume market, which means people are probably sitting at this point waiting to see the next step.”

The focus will also be on the new economic projections, which are due to be released alongside the Fed’s policy statement at 2 p.m. ET (6:00 p.m. GMT) on Wednesday. Read more

Concerns over Fed tightening have driven the S&P 500 down 19% this year, with a recent disastrous earnings report from delivery company FedEx Corp (FDX.N), an inverted U.S. Treasury yield curve. and warnings from the World Bank and IMF. about an impending global economic downturn adding to the woes. Read more

Goldman Sachs lowered its forecast for 2023 U.S. GDP on Friday night as it forecasts a more aggressive Fed and sees that pushing the unemployment rate higher than it had previously forecast.

As of 1:53 p.m. ET, the Dow Jones Industrial Average (.DJI) fell 19.45 points, or 0.06%, to 30,802.97, the S&P 500 (.SPX) was down 2.26 points, or 0.06%, to 3,871.07 and the Nasdaq Composite (.IXIC) lost 5.63 points, or 0.05%, to 11,442.78.

Four of the 11 S&P 500 sectors were down. Healthcare stocks (.SPXHC) fell 1.1%, weighed down by a 9.2% drop in shares of Moderna Inc (MRNA.O) and similar declines in other vaccine makers one day after President Joe Biden said in a CBS interview that “the pandemic is over”. Read more

Industrial stocks (.SPLRCI) rebounded 0.7% after falling sharply on Friday. Banks (.SPXBK) gain 0.5%. Tech heavyweights Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) rose more than 1% each to give the biggest boost to the S&P 500 and Nasdaq.

Take-Two Interactive Software Inc (TTWO.O) fell 0.2%, recovering from a steeper fall earlier in the day, after confirming that a hacker had leaked the first footage of Grand Theft Auto VI, the next installment of the best-selling video game. Read more

Meanwhile, Knowbe4 Inc jumped 28.3% to $22.19, its highest level since early May, after the cybersecurity firm said Vista Equity Partners offered to take it private for $24 per share, valuing the company at $4.22 billion. Read more

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Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru and David French in New York; Editing by Shounak Dasgupta, Anil D’Silva and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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