🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Wall Street edges higher as investors eye Fed pause

Published 18/09/2023, 08:25 pm
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023.  REUTERS/Brendan McDermid
NDX
-
US500
-
DJI
-
GS
-
MU
-
ESU24
-
1YMU24
-
NQU24
-
BX
-

By Stephen Culp

NEW YORK (Reuters) - Wall Street notched tentative gains on Monday as market participants looked ahead to the U.S. Federal Reserve's expected decision to leave key interest rates unchanged on Wednesday.

All three major U.S. stock indexes were up modestly in a choppy session, with few catalysts and little conviction heading into the Fed's two-day monetary policy meeting.

"(Fed Chairman Jerome) Powell can spark big moves in either direction with his comments and you don’t want to get caught on the wrong side of it," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "The best strategy for the next couple of days is waiting to see what transpires."

The central bank has vowed to remain agile with respect to economic data, which has shown signs that core inflation remains on its meandering descent back toward the Fed's annual 2% target, and suggests the U.S. economy remains on firm footing.

Against this backdrop, growing jitters that a stalemate on Capitol Hill could result in a potential government shutdown had market participants on edge.

Treasury Secretary Janet Yellen on Monday said that while she sees no risk of an economic downtown, she warned that a government shutdown would be "Creating ... a situation that could cause a loss of momentum is something we don't need as a risk at this point."

The week's main event is the Fed's policy meeting, which is expected culminate in a rate hike pause, leaving the Fed funds target rate unchanged for the second time since March 2022, when the central bank fired its opening salvo in its battle against inflation.

The Federal Open Markets Committee (FOMC) is also due to release its quarterly Summary of Economic Projections, which will include the "dot plot," or a glimpse into participating members' expectations regarding the future path of interest rates.

Financial markets have currently baked in a 99% certainty that the Fed will hold the key rate at 5.25%-5.00% on Wednesday. Beyond that, the trajectory is less certain, with a 69% likelihood of the FOMC holding firm in November, according to CME's FedWatch tool.

The Dow Jones Industrial Average rose 42.38 points, or 0.12%, to 34,660.62, the S&P 500 gained 7.39 points, or 0.17%, to 4,457.71 and the Nasdaq Composite added 21.87 points, or 0.16%, to 13,730.20.

Technology shares, led by Apple Inc (NASDAQ:AAPL), were the biggest gainers among the 11 major sectors of the S&P 500, while consumer discretionary stocks suffered the biggest percentage drop, with Tesla (NASDAQ:TSLA) Inc and Microsoft Corp (NASDAQ:MSFT) weighing heaviest.

VF Corp (NYSE:VFC) slumped 4.7% after Piper Sandler downgraded the apparel company's shares to "neutral" from "overweight."

British chipmaker Arm Holdings (NASDAQ:ARM) slid 7.2% after Bernstein initiated coverage with an "underperform" rating just days after its stellar debut.

Paypal Holdings dipped 1.6% after MoffettNathanson cut its rating to "market perform" from "outperform."

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023.  REUTERS/Brendan McDermid

Declining issues outnumbered advancing ones on the NYSE by a 1.02-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored decliners.

The S&P 500 posted 5 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 34 new highs and 205 new lows.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.