Stocks rose on Wednesday as investors awaited another interest rate hike from the Federal Reserve, which is struggling to control rising inflation.
The Dow Jones Industrial Average rose 155 points, or 0.51%. The S&P 500 rose 0.58%, and the Nasdaq Composite added 0.47%.
Short term Interest rates were rising in anticipation Fed’s Next Super Rate Hike With Yields The 2-year Treasury rose to 4% on Wednesday morning For the first time since 2007.
“It’s the calm before the storm — obviously a little oversold here ahead of the all-important Fed meeting, but very little,” said Ryan Dedrick, chief market strategist at the Carson Group. “We know things can move a currency, but there is some brief optimism ahead of the central bank.”
The central bank is expected to provide its on Wednesday A third consecutive 0.75 percentage point rate hike. A higher-than-expected consumer price index reading in August and hawkish comments from Fed chiefs about rate hikes have weighed on stocks, with more pressure likely to come as the central bank continues its battle.
Investors will be watching Central Bank’s Long Term ForecastsPay close A focus on the terminal fed funds rate The last forecast in June 2023 was 3.8%. However, some economists expect the central bank to raise it Over 4% forecast. The terminal rate is the level at which the central bank will take rates before it stops tightening.
The forecast — and comments from Chairman Jerome Powell — should provide more insight into how much interest rates could rise and how that could affect economic growth.
The S&P 500 has fallen more than 8% in the past month, giving up most of its summer bounce as traders begin to fear the Fed will raise rates too far and push the economy into recession. Benchmarks are flat for Wednesday’s decision week.