Stocks rose on Wednesday as investors awaited another possible interest rate hike from the Federal Reserve as it struggles to tame rising inflation.
The Dow Jones Industrial Average rose 140 points, or 0.47%. The S&P 500 rose 0.47%, and the Nasdaq Composite rose 0.25%.
As stocks rallied, the two-year Treasury yield rose 4% for the first time since October 2007.
“It’s the calm before the storm — there’s a little oversold bounce here ahead of the very important Fed meeting, but very little volume,” said Ryan Dettrick, chief market strategist at The Carson Group. “We know things could turn around a dime, but there is some brief optimism ahead of the Fed.”
The central bank is expected to deliver on Wednesday The third consecutive increase of 0.75 percentage points. A higher-than-expected CPI reading in August and hawkish comments on rate hikes from Fed leaders weighed on stocks, and there is likely to be more pressure going forward as the central bank continues its battle.
Investors will watch Central Bank’s long-term outlookpush close Pay attention to the final federal funds rate The last forecast was in June for it to reach 3.8% in 2023. However, some economists expect the Federal Reserve to raise that forecast above 4%.
The forecasts – and comments from Chairman Jerome Powell – should provide further insight into how much more interest rates could rise and how that might affect economic growth.
On the earnings front, results for Lennar, KB Homes and Steelcase are set to be released after the bell. Existing home sales data showed a decline in July.
stock fell Tuesday With the start of the Federal Open Market Committee’s two-day policy meeting.
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