US stocks fall ahead of Fed rate decision
Wall Street lost ground on Tuesday, with risk-off sentiment weighing as the US Federal Reserve convened for its much-anticipated two-day monetary policy meeting. All three indexes ended the session lower in a broad sell-off ahead of the Fed's interest rate announcement on Wednesday, which is expected to culminate in a decision to leave key interest rates unchanged. "It’s a big set up coming into tomorrow and markets are clearly focused on any change in communication from the Federal Reserve," said Bill Northey, senior investment director at US Bank Wealth Management in Helena Montana, who expects "intense focus on the Fed’s perspective on inflation in the post-meeting press conference." "Broad inflation readings have shown marked progress over the last year," Northey added. "But the last mile of inflation is likely going to be more challenging, bringing it back toward the Federal Reserve's target of 2 percent." The Fed is also due to release its Summary Economic Projections, including its dot plot, which should provide a glimpse into the Federal Open Markets Committee's forecast trajectory of interest rates, inflation and economic growth. "What’s being priced into the market is a pause but increased risk that rates will stay higher for longer," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. "If (the Fed) announced that they are removing rate cuts in 2024 by raising the dot plot, it would generally be seen as a very hawkish pause." On the economic front, a jump in Canada's annual inflation rate due to rising gasoline prices, and a bigger-than-expected plunge in US housing starts helped feed investor uncertainty. The languid IPO market continues to show signs of life, with grocery delivery app Instacart's parent Maplebear making its Nasdaq debut, days after chipmaker Arm Holdings' stellar entry to the public marketplace last week. Maplebear shares jumped 12.3 percent, while Arm Holdings lost 4.9 percent. The Dow Jones Industrial Average fell 0.31 percent, to 34,518, the S&P 500 lost 0.22 percent, to 4,444 and the Nasdaq Composite dropped 0.23 percent, to 13,678. Walt Disney slid after the company announced it would nearly double its capital expenditure for its parks business over the next 10 years. (Reuters)_____________________________
Last updated: 2023-09-20 HKT 09:08 