Stocks Hold Steady, Yields Decline As Fed Meeting Looms: What's Driving Markets Wednesday?

Midway through the trading day on Wall Street, calm reigns supreme as investors eagerly await the Federal Reserve’s decision on interest rates.

The Federal Open Market Committee (FOMC) is scheduled to publish its policy statement at 2 p.m. ET, followed by Chair Jerome Powell‘s address at 2:30 p.m.

While it is widely anticipated that the Federal Reserve will maintain its fed funds target range steady at 5.25%-5.5%, there is growing anticipation surrounding the release of new economic projections.

Market participants are particularly focused on the”‘dot plot,” which can shed light on the preferred interest rate trajectory within the Fed board. This information will help gauge whether the central bank’s policies will align with or deviate from the current market expectation of five rate cuts by 2024.

As of noon in New York, U.S. major indices traded relatively flat. The U.S. dollar, as tracked by the Invesco DB USD Bullish Fund ETF UUP, remained stable, while Treasury yields dipped by approximately 5 basis points across various maturities, with the 10-year yield standing at 4.17%.

The iShares 20+ Year Treasury Bond ETF TLT gained 0.9%, gold inched up by 0.2%, and Bitcoin BTC/USD surged by 1%.

Crude oil prices rose by 1.2%, with West Texas Intermediate (WTI) trading around $70 per barrel. This increase comes as a sigh of relief after COP 28 provided signals that were less severe than expected in terms of reducing fossil fuel consumption.

Wednesday Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was 0.1% higher to $464.50, the SPDR Dow Jones Industrial Average ETF DIA was flat at $366.44 and the Invesco QQQ Trust QQQ was 0.2% higher to $399.52, according to Benzinga Pro data.

Sector-wise, utilities outperformed, with the Utilities Select Sector SPDR Fund XLU soaring 1%. Materials were the laggard, with the Materials Select Sector SPDR Fund XLB down 0.9%.

Among industries, biotech stocks, as tracked by the SPDR S&P Biotech ETF XBI, rose 1.7%. Airlines lagged behind, with the U.S. Global JETS ETF JETS down 2.2%.

Stocks In Focus

• Tesla, Inc. TSLA fell 2.7% after the company filed with the National Highway Traffic Safety Administration regarding the recall of 2 million vehicles.
• Pfizer Inc. PFE tumbled over 7%, hitting the lowest in 10 years, as the company warned that Covid-related revenue could fall. In a similar fashion, Moderna Inc. MRNA fell 4.6%.
• Shares of Vertex Pharmaceutical Inc. VRTX rallied over 10%, setting an all-time high of $395, amid successful mid-stage trial of its non-opioid medication VX-548, demonstrating efficacy in nerve pain reduction.

Read now: Will Recession Accompany Bull Market In 2024? Analysts Project S&P 500 Nearing 5,000 Mark

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