US stocks trade mixed as investors await inflation outlook from the Fed
Lucas Jackson/Reuters
- US stocks were quiet at the open as investors looked towards the Fed for signals about inflation.
- The FOMC is expected to hold interest rates unchanged and announce no changes to its asset purchases.
- Oil prices continued to march higher.
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US stocks were mixed Wednesday as investors paused before a key decision by the Federal Reserve coming later in the day.
The Federal Open Market Committee is expected to hold interest rates unchanged and announce no changes to its asset purchases when the decision is released at 2 p.m ET. Robertson Stephens Wealth Management chief economist Jeanette Garretty expects the central bank to continue to avoid announcing a concrete plan to change its bond-buying program.
"This FOMC meeting is likely to be the most important step, signaling to markets that the reduction of QE is conclusively on the discussion agenda, while avoiding any indication of 'when' or 'how,'" she said. "I believe that economic conditions allow, perhaps require, the Fed to scale back QE but I believe that the Fed wishes to still keep this action firmly in 'maybe' territory. As such, the wordsmithing of the meeting announcements will be considerable - and tricky."
Here's where US indexes stood at the 9:30 a.m. ET open on Wednesday:
- S&P 500: 4,251.68, up 0.12%
- Dow Jones industrial average: 34,320.98, up 0.06% (21.65 points)
- Nasdaq composite: 14,096.93, up 0.17%
The Fed is also expected to speak on the state of the US economy.
"In the last meeting, there was an expression of cautious optimism. In this meeting, I would expect the language to be more one of confirmed optimism, albeit continuing to emphasize the still-large number of unemployed and partially employed and the incomplete vaccination of the population. Investors may be looking for some statement regarding inflation, but I believe the Fed will maintain its viewpoint that current price pressures are transitory," Garretty added.
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Initial public offerings in the US this year have already broken 2020's record with six months still go in the year. In the first half of this year alone, IPOs have raised $171 billion, surpassing last year's record $168 billion, with the help of the Federal Reserve's low interest rate policies.
The low rate environment has also helped the rise of mergers and acquisitions activity, said Goldman Sachs global head of M&A structuring. In a Monday interview, David Dubner he is seeing no signs of stopping for a "superbloom" of M&A activity and separation activity.
West Texas Intermediate crude paused its rally and was down 0.2% to $71.98. Brent crude, oil's international benchmark, climbed 0.6%, to $74.73 per barrel, at intraday highs.
Gold climbed as much as 0.1%, to $1,863 per ounce.