Wall Street Gains After Fed Holds Rates, Eyes Possible December Hike
U.S. stocks edged higher on Wednesday following the Federal Reserve's decision to keep its policy rate unchanged, while market expectations shifted toward a potential rate increase in December.
Wall Street stocks mostly rose on Wednesday after the U.S. Federal Reserve left its key policy rate unchanged, a move that was widely anticipated. The central bank’s statement noted an upgraded assessment of the economy but said inflation "remains elevated," and Fed Chair Kevin Warsh emphasized the Fed’s readiness to act if needed.
"The Fed didn't throw any curveballs," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "It was widely expected they'd hold, so no big surprise there." He added that pressure could build for another 25-basis-point hike in December if inflation continues to be a concern.
The S&P 500 and the Dow Jones Industrial Average posted modest gains, while the Nasdaq slipped slightly. Market pricing now reflects an 87.4% probability of a rate hike at the December meeting, up from 78.3% the day before, according to CME's FedWatch tool.
Investors will watch Thursday’s data releases, including the Commerce Department’s personal consumption expenditures report and an advance estimate of third-quarter GDP, for clues on the Fed’s future path. Meanwhile, earnings season continues, with 84% of the 200 S&P 500 companies that have reported so far beating consensus estimates, and analysts projecting year-on-year earnings growth of 31.8% for the quarter.
Oil prices rose after Iran-backed Houthi forces attacked a refinery in Saudi Arabia, adding to supply concerns that have kept crude above $100 a barrel since the start of the regional conflict.