Stocks on Wall Street are drifting lower as investors await the Federal Reserve’s decision on interest rates and guidance on future rate cuts. The S&P 500 is down 0.1% in early trading, while the Dow Jones Industrial Average has slipped 0.1%, and the Nasdaq composite is relatively unchanged. Treasury yields are holding steady in the bond market.
Investors are awaiting the Federal Reserve’s announcement, expected later today, on whether it will leave its main interest rate unchanged at a two-decade high. There is speculation about the timing and number of rate cuts the Fed might implement later this year. The hope for rate cuts has been a driving force behind the recent record highs in U.S. stocks, as they are seen as a way to relieve pressure on the economy and financial system.
Recent reports on inflation have been worse than expected, which could lead the Fed to indicate fewer rate cuts this year than previously anticipated. Traders have already adjusted their expectations and do not expect a rate cut at this meeting.
In premarket trading, General Mills rose 4% after reporting third-quarter sales and profit that beat expectations. Chipotle also jumped 5.5% after announcing a stock split.
In Europe, the FTSE 100 in London slipped 0.2% after British inflation came in below expectations, supporting hopes for rate cuts. Germany’s DAX gained 0.2% and the CAC 40 in Paris fell 0.6%.
Japan’s markets were closed for a holiday, but on Tuesday, the Bank of Japan raised its benchmark interest rate for the first time in 17 years. The U.S. dollar rose against the Japanese yen following the BOJ’s decision.
In China, the benchmark lending rates were left unchanged as expected, despite signs of improvement in the economy.
U.S. benchmark crude oil lost 99 cents to $81.74 per barrel, while Brent crude shed 96 cents to $86.42 per barrel. The euro is down to $1.0844, and Bitcoin is stable at $63,872 after a recent slide.
On Tuesday, the S&P 500, Dow Jones Industrial Average, and Nasdaq composite all rose, with the S&P 500 reaching a new all-time high.
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