Wall Street flat, but trading choppy ahead of Fed rate meeting

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  • All eyes on the Fed’s policy decision on Wednesday
  • Traders are pricing in little chance of a 100 bps rate hike
  • Take Two’s GTA VI gameplay footage leaked online
  • Index all down 0.05%-0.06%

Sept 19 (Reuters) – Wall Street’s main indexes were flat in the early afternoon on Monday amid choppy trading, bouncing around as investors waited to see how aggressive the Federal Reserve would be this week with its interest rate hike.

Even more than the war in Ukraine or corporate earnings, the actions of the US Federal Reserve are driving 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 declines since June on Friday, as markets fully priced in at least 75 basis points at the end of the Fed’s 20-21 meeting. September. , with Fed Funds futures showing a 15% chance of a mammoth 100 bps increase.

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Unexpectedly warm inflation data from August last week also increased bets on more rate hikes on the way, with the terminal rate for US funds now at 4.46%.

“The path of least resistance is still down. The trend followers out there will continue to try 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 over the course of the year. It’s a lower volume market, which means people are probably just sitting tight at this point, waiting to see the next move.”

The focus will also be on new economic forecasts, which will be published together with the Fed’s policy statement at 2:00 PM ET (1800 GMT) on Wednesday. read more

Concerns about Fed tightening have led to a 19% decline in the S&P 500 this year, with a recent dire earnings report from delivery firm FedEx Corp ( FDX.N ), an inverted U.S. Treasury yield curve and warnings from the World Bank and IMF of an impending global economic downturn that adds to the woes. read more

Goldman Sachs cut its forecast for 2023 US GDP late on Friday as it projects a more aggressive Fed and sees it pushing the unemployment rate higher than previously expected.

At 1:53 PM ET, the Dow Jones Industrial Average (.DJI) fell 19.45 points, or 0.06%, to 30,802.97, the S&P 500 (.SPX) lost 2.26 points, or 0.06%, to 3,871.07 and Nas. IXIC) fell 5.63 points, or 0.05%, to 11,442.78.

Four of the 11 S&P 500 sectors were lower. Healthcare shares ( .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 a day after President Joe Biden said in a CBS interview that “that pandemic is over”. Read more

Industrial shares (.SPLRCI) rose 0.7% after falling sharply on Friday. The banks (.SPXBK) rose 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 decline earlier in the day, after it confirmed a hacker had leaked early footage of Grand Theft Auto VI, the next installment of best selling video game. read more

Meanwhile, Knowbe4 Inc ( KNBE.O ) jumped 28.3% to $22.19, its highest level since early May, after the cybersecurity firm said Vista Equity Partners had offered to take it private for $24 a 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: Thomson Reuters Trust Principles.

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