Goldman Sachs is out with its near-term forex outlook
Investing.com -Canada’s main stock exchange ended slightly higher on Wednesday, as Fed left interest rates unchanged, expected by market.
The Toronto Stock Exchange’s S&P/TSX composite index was trading up by 0.07%, gaining 18 points at 26,559.85 points.
Investors had been hoping that a bout of violence between Israel and Iran would be contained and for progress in trade negotiations during a meeting of Group of Seven leaders this week.
However, the fighting has now extended into its sixth day. Meanwhile, U.S. President Donald Trump left the gathering in the Canadian province of Alberta early, although he and Canadian Prime Minister Mark Carney agreed that they should wrap up talks over a new economic and security deal within 30 days.
U.S. stocks shed gains
U.S. stocks shed gains as Federal Reserve Chair Jerome Powell said monetary policy required some restraint on the economy.
Around midday trading, theDow Jones Industrial Average ell 43.83 points, or 0.10%, to 42,171.97, the S&P 500 lost 2.37 points, or 0.04%, to end at 5,980.35 points and the NASDAQ Composite gained 23.66 points, or 0.12%, to 19,544.75.
Fed kept the rates as it is.
Potential U.S. entry into Israel-Iran conflict
The ongoing conflict in the Middle East continues to cast an pall over investor sentiment.
Iranian Supreme Leader Ayatollah Ali Khamenei responded to Trump’s recent demand for Tehran’s surrender, saying any U.S. strike on the country would have "serious irreparable consequences."
Trump is mulling various options, including a potential U.S. strike against Iran, after meeting with top advisers in the Situation Room at the White House on Tuesday, The Wall Street Journal reported Tuesday, citing unnamed administration officials.
A Reuters report stated that the U.S. military is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes.
In a social media post Tuesday, U.S. President Donald Trump demanded that Iran agree to an "unconditional surrender," saying that "we now have complete and total control over the skies over Iran."
Trump held a 90-minute meeting with the National Security Council on Tuesday afternoon to address the escalating conflict, Reuters reported on Tuesday, citing a White House official.
Though the Pentagon called the buildup defensive, it fueled concerns that the U.S. may join the conflict against Iran.
Fed set to conclude policy meeting
The conclusion of the latest Federal Reserve policy meeting is set to be at the forefront of investors’ minds Wednesday, as they look for clues surrounding the likelihood of further interest rate cuts this year.
Economists widely expect the Fed to hold rates steady in the 4.25%-4.50% range, as the policymakers gauge the impact of Trump’s sweeping tariff plans on inflation and the broader economy.
Officials are also tipped to maintain a wait-and-see approach to future borrowing cost reductions, a stance the central bank has adopted as economists warn that the levies could fuel price pressures and weigh on growth.
Crucially, the Fed will release an update to its closely-watched "dot plot," which brings together officials’ projections for the trajectory of rates.
Investors currently see a slightly more than even chance that the Fed will not unveil its next rate cut until September, according to CME Group’s FedWatch Tool.
Data to be released Wednesday also includes May’s housing starts and preliminary building permits, which should give a glimpse behind the curtain on the state of the U.S. housing market, as well as weekly jobless claims.
Crude volatile
Oil prices were choppy on Wednesday as the conflict between Israel and Iran continued.
At 4.05 ET, Brent futures was almost flat 0.05% to $76.46 a barrel and U.S. West Texas Intermediate crude futures was down 0.7% to $73.25 a barrel.
The benchmark contracts posted gains of over 4% Tuesday, as markets fretted about potential supply disruptions in the Strait of Hormuz, a conduit for a fifth of the world’s seaborne oil.
Gold reverses course
Gold prices which was hovering around the flatline on most Wednesday, were trading down.
On Tuesday, bullion reversed a bulk of its recent gains after reports that Iran was seeking a ceasefire spurred some risk-on sentiment. But Tehran said it will not seek a truce when under fire from Israel, while a warning from Trump also ramped up fears that an escalation in the war was imminent.
Spot gold was down 0.68% to $3,364 an ounce, while gold futures for August fell 0.7% to $3,383.40/oz by 4.05 ET.