Wall Street ends choppy session higher with firm focus on Fed

Wall Street ends choppy session higher with firm focus on Fed

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  • All eyes are on the Fed’s policy decision on Wednesday
  • Traders price in a small chance of a 100 bps rate hike
  • Take Two’s GTA VI Gameplay Footage Leaked Online
  • Knowbe4 jumps on the private offer
  • Indices up: Dow 0.64%, S&P 0.69%, Nasdaq 0.76%

Sep 19 (Reuters) – Wall Street’s major indexes ended a choppy session on Monday as investors looked to this week’s policy meeting at the Federal Reserve and how aggressively it will raise prices. interest rate.

Even more than the war in Ukraine or corporate earnings, US central bank actions are boosting market sentiment as traders try to position themselves for a rising interest rate environment.

The S&P 500 (.SPX) and Nasdaq (.IXIC) rebounded after posting their worst weekly percentage decline since June on Friday, as markets fully priced in a rate hike of at least 75 basis points at the end of the September 20 Fed. 21 policy meeting, with fed funds futures showing a 15% chance of a huge 100 basis point hike.

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Surprisingly warm August inflation data last week also sparked bets on more rate hikes going forward, with the US federal funds terminal rate now at 4.46%.

“It’s about what’s going to happen on Wednesday and what’s coming out of the hands of the Fed on Wednesday, so I think people are just going to wait and see until then,” said Josh Markman, partner at Bel Air Investment. Advisors.

“We had a bad feeling when the CPI came in, so the Fed – which is behind the 8-ball – is now trying to get ahead of the curve and rein in inflation, and that (the awareness ) boosts stock markets.”

Reflecting caution for new bets ahead of the Fed meeting, just 9.58 million shares traded on U.S. exchanges on Monday, the sixth-lightest day for trading volume this year.

The focus will also be on the new economic projections, which are due to be released alongside the Fed’s policy statement at 2 p.m. ET (6:00 p.m. GMT) on Wednesday. Read more

Concerns over Fed tightening have dragged the S&P 500 down 18.2% this year, with a recent disastrous earnings report from delivery company FedEx Corp (FDX.N) yield curve reversed US Treasury and World Bank and IMF warnings of impending risk. the global economic slowdown adds to the woes. Read more

Goldman Sachs lowered its forecast for 2023 U.S. GDP on Friday night as it forecasts a more aggressive Fed and sees that pushing the unemployment rate higher than it had previously forecast.

“The Fed will keep going, we’ll get 75 (bps) on Wednesday, but what comes next and whether or not they’re going to take a break after Wednesday, that’s going to be the interesting part,” Bel Air’s Markman said. .

The Dow Jones Industrial Average (.DJI) rose 197.26 points, or 0.64%, to 31,019.68, the S&P 500 (.SPX) gained 26.56 points, or 0.69%, to 3,899.89 and the Nasdaq Composite (.IXIC) added 86.62 points, or 0.76%, to 11,535.02.

Most of the 11 S&P 500 sectors rose. One exception was healthcare (.SPXHC), down 0.6% as it was weighed down by a drop in shares of vaccine maker Moderna Inc (MRNA.O) a day after President Joe Biden said in a CBS interview that “the pandemic is over”. Read more

Industrials (.SPLRCI) rebounded 1.4% after a sharp decline on Friday, while banks (.SPXBK) gained 1.9%. Tech heavyweights Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) rose 2.5% and 1.9%, respectively, to give the biggest boost to the S&P 500 and Nasdaq .

Take-Two Interactive Software Inc (TTWO.O) closed 0.7% higher after recovering from a slump earlier in the day caused by confirmation that a hacker had leaked the first footage of Grand Theft Auto VI, the next installment of the best-selling video game. Read more

Meanwhile, Knowbe4 Inc (KNBE.O) jumped 28.2% to $22.17, its highest close since May 4, after the cybersecurity firm said Vista Equity Partners offered to sell. privatize for $24 per share, valuing the company at $4.22 billion. Read more

The S&P 500 posted a new 52-week high and 28 new lows; the Nasdaq Composite recorded 29 new highs and 378 new lows.

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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: The Thomson Reuters Trust Principles.

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