Stocks drift and bond yields rise as markets wait for the Fed


New York-Wall Street got off to a mixed start on Wednesday, and bond yields are rising as traders look forward to an announcement later that day on interest rates from the Federal Reserve Board. The Fed is widely expected to double its benchmark short-term interest rate by 0.5 percentage points to strengthen its fight against inflation. Several companies have made a big move in revenue news. Lyft sank 30% after announcing a weaker outlook than analysts expected, while Airbnb and Starbucks both rose after reporting solid results. The S & P 500 was floating between small gains and losses.

This is the latest news update. The previous story of AP is as follows.

New York — Wall Street headed for profit before the market opened on Wednesday as investors waited for the Federal Reserve to announce another expected rate hike.

Dow Jones Industrial Average 30 and S & P 500 futures rose 0.4% within two hours of market opening.

Asian stocks have fallen mostly and European markets were primarily in the negative territory by noon.

Central banks in many countries are raising interest rates because inflation is putting pressure on businesses and consumers. To counter this, regulatory agencies are gradually increasing borrowing costs, which have fallen to hit record lows during a pandemic.

Fed policymakers are expected to double the US central bank’s benchmark rates this week to intensify its fight against inflation, the highest level in 40 years. The Federal Reserve has already raised its major night rates once. This is the first increase since 2018, and Wall Street expects some significant increases in the coming months.

“All eyes are on the FOMC conference and rate hikes are absolutely given,” Clifford Bennett, chief economist at ACY Securities, said in a comment.

Germany’s DAX was upset between marginal gains and losses, while CAC 40 in Paris lost 0.5% and the UK’s FTSE 100 fell below 0.4%.

In Asian trading, the Hang Seng Index in Hong Kong fell 1.1% to 20,861.27 and the KOSPI Index in Seoul fell 0.1% to 2,677.57. Australia’s S & P / ASX 200 gave up 0.2% at 7,304.70.

India’s Sensex was down 1% to 56,425.88. Taiwan’s benchmarks have risen and most other regional markets, including Japan and mainland China, have closed.

Higher lending rates can weigh on economic growth as soaring prices weigh on consumers’ spending capacity.

Market players may get bargains, given that rate hikes have already been considered, according to Bennett. But he added: “This eliminates the ongoing shock to consumers, especially mortgage holders, who have an accelerating impact on the economy as a whole. This” pain “process can last for the next 1-3 years in the real world. There is sex. “

In addition to that, there are uncertainties brought about by Russia’s invasion of Ukraine.

Slovakia and Hungary said they opposed such measures, but oil prices soared as the European Union said it was preparing new sanctions on Russia’s energy over the war in Ukraine.

Newly proposed sanctions drafted by the European Commission, the EU’s executive branch, may include a gradual embargo on Russian oil. It can squeeze supply and push prices even higher.

Benchmark US crude rose $ 4.57 per barrel to $ 106.98 in electronic trading on the New York Mercantile Exchange. It gave up $ 2.76 on Tuesday.

Brent crude, the basis for international oil pricing, rose $ 4.53 to $ 109.50 per barrel.

Investors are scrutinizing the latest corporate profits to get more details on how inflation affects business and consumer activity.

They also have some updates on the stronger and growing labor market, although their recovery from the pandemic was slow at first. The Bureau of Labor Statistics reported on Tuesday that employers posted a record 11.5 million jobs in March. This means that the United States currently has two unprecedented jobs per unemployed.

According to FactSet, on Friday the Ministry of Labor will report that the economy created an additional 396,000 new jobs in April. This shows that more than 400,000 people have been hired for the unprecedented 12 months in a row.

The US dollar fell from 130.11 yen to 129.94 yen late Tuesday. The euro rose slightly to $ 1.0529.

Associated Press