U.S. stocks wavered on Wednesday as Wall Street prepared for an interest rate decision from the Federal Reserve due later in the day.
The S&P 500 (^GSPC) added 0.14% during midday trading, while the Dow Jones Industrial Average (^DJI) ticked below the flatline. The technology-heavy Nasdaq Composite (^IXIC) edged up 0.33% at 12:01 pm ET.
Wall Street will closely watch Fed Chair Jerome Powell’s press conference for hints on whether the central bank plans to continue its cycle of tightening in June.
At the same time, some market participants have anticipated Wednesday’s expected rate hike could be the last of the cycle. But Chairman Jerome Powell could confirm or steer away from those assumptions.
WASHINGTON, DC – APRIL 21: Federal Reserve Board Chairman Jerome Powell listens during an open session of a Financial Stability Oversight Council meeting at the Department of the Treasury. (Photo by Alex Wong/Getty Images)
Analysts say inflation remains sticky, the labor market is still hot but softening, and the economy is resilient. Plus, recent bank failures could set up the case for a pause, along with the Treasury Department’s new projections adding more caution to the mix as lawmakers may have less than a month to reach a debt-ceiling deal.
“Today was always likely to mark the end of the US central bank’s tightening cycle — not that it has explicitly signaled this — but we’ve now reached a stage in which every rate hike could have unwanted and unintended consequences,” Craig Erlam, Senior Market Analyst at OANDA, wrote in a research note.
“With that in mind, it would be perfectly reasonable to pause today especially when we’re already starting to see signs of the labor market softening and inflation easing,” Erlam added.
On Wednesday, government bonds were lower. The yield on the 10-year note ticked down to 3.38% while the two-year note yield dipped to 3.9%. Oil prices fell — futures for West Texas Intermediate, the U.S. benchmark, dropped 5% to $68.05 a barrel — below $70 for the first time since March.
Meanwhile, the sale of First Republic Bank’s…
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