Stock market today: Wall Street drifts ahead of a decision on rates from the Federal Reserve

Stock market today: Wall Street drifts ahead of a decision on rates from the Federal Reserve

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NEW YORK (AP) — Stocks fell in morning trading on Wall Street Wednesday as markets await the Federal Reserve's latest announcement on interest rate policy and guidance on the timing and size of potential rate cuts. at the end of this year.

The S&P 500 was virtually unchanged and is coming off an all-time high. The Dow Jones Industrial Average rose 6 points, or less than 0.1%, and the Nasdaq Composite fell 0.1% as of 10:46 a.m. ET.

Treasury yields remained relatively stable in the bond market.

Mexican food chain Chipotle rose 6% after announcing a stock split, the first in its history. Cheerios maker General Mills rose 2.2% after reporting financial results that easily beat analysts' forecasts.

The Federal Reserve began its latest interest rate meeting on Tuesday and will announce its decision later on Wednesday. The widespread expectation is that the central bank will leave its main interest rate at its highest level in two decades. Investors expect the Federal Reserve to signal that it still expects to cut rates three times later this year, as it hinted a few months ago.

Stocks have been rising to records amid hopes that the Federal Reserve is moving closer to cutting interest rates, which would ease pressure on the economy and financial system. Wall Street is betting that the central bank will begin cutting its benchmark interest rate at its June meeting.

The central bank began raising interest rates in 2022 in an effort to control inflation and return it to its 2% target. Inflation has cooled broadly since then, with consumer prices falling at a rate of 3.2% in February from a peak of 9.1% in mid-2022. At the same time, consumers continued to spend and the economy grew. , despite concerns that interest rates would be so severe. Rate increases could cause a recession.

Wall Street has been concerned about the challenges the Federal Reserve faces in reducing inflation further going forward. However, recent inflation reports have been consistently worse than expected. This has raised concerns that the Federal Reserve will go ahead with fewer rate cuts this year. The central bank will receive another inflation update next week with February data for its preferred measure that focuses on consumption and personal spending.

Markets in Europe and Asia had mixed results. Japan's markets were closed for a holiday a day after the Bank of Japan raised its benchmark interest rate for the first time in 17 years, raising the rate to a range of zero to 0.1% from -0.1%. .

London's FTSE 100 rose 0.1% after British inflation in February came in below expectations at 3.4%, its lowest level since September 2021. That supports hopes for rate cuts in the next months.

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Zimo Zhong contributed to this report.

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