Blue Chips Rise, Tech Slips Ahead of Fed Meeting: What's Driving Markets Wednesday?

Midway through Wednesday’s trading session in New York, U.S. stocks managed to eke out modest gains, with the technology sector being the only laggard for the day as traders anxiously await the Federal Reserve meeting scheduled for 2 p.m. Wednesday.

The Fed is highly anticipated to keep rates steady at 5.25%-5.5%, but the focus is squarely on updated economic projections that could reveal a more hawkish stance on interest rates than initially expected.

This could potentially leave the door ajar for further rate hikes later in the year and fewer rate cuts for next year, making Fed Chair Jerome Powell‘s press conference at 2:30 p.m. a closely watched event.

Both the dollar and U.S. Treasury yields were slightly lower, after the 10-year yield hit the highest level in 16 years on Tuesday.

Cues From Wednesday's Trading:

The S&P 500 was 0.2% higher, while blue-chip stocks in the Dow Jones rose 0.6%.

The tech-heavy Nasdaq 100 index slipped 0.2%. Small caps in the Russell 2000 Index managed to rise 0.6%.

US Index Performance On Wednesday

Thursday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.2% higher to $443.65.
• The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose 0.6% to $346.98.
• The Invesco QQQ Trust (NASDAQ:QQQ) eased 0.1% to $369.69, according to Benzinga Pro data.

Looking at S&P 500 sectors:

• The Real Estate Select Sector SPDR Fund (NYSE:XLRE) (NYSE:XLK) led gains, up 1.1% for the day.
• The Technology Select Sector SPDR Fund (NYSE:XLU) was the laggard, down 0.1%

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Upcoming Economic Data:

In the week concluding Sept. 15, the average interest rate for 30-year fixed-rate mortgages increased by 4 basis points to reach 7.31%, again hitting the 23-year highs reached in August, the Mortgage Bankers Association of America reported.

Mortgage applications surged by 5.4% during the same week, 2023, marking the first increase in three weeks.

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Stocks In Focus:

• Western Digital Corp. (NASDAQ:WDC) rose over 5% as lenders associated with WDC’s joint venture partner, Kioxia Holdings, are in the process of refinancing 2 trillion yen in loans.
• Zebra Technologies Corp. (NASDAQ:ZBRA) fell nearly 5% after Morgan Stanley downgraded the company to Underweight.
• Frontier Communication Parent (NASDAQ:FYBR) rose over 6% after Ares Management augmented its stake in the company.
• Coty Inc. (NYSE:COTY) rose 5% after the company boosted its fiscal 2024 first-half and full-year revenue outlooks amid strong demand.
• Darden Restaurants, Inc. (NYSE:DRI) and FactSet Research Systems, Inc. (NYSE:FDS) will announce their earnings reports after the market close.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 0.6%, with a barrel of WTI-grade crude trading at $90. The United States Oil Fund ETF (NYSE:USO) was 0.7% lower to $80.98.  

Treasury yields were slightly lower, with the 10-year yield down by 3 basis points to 4.33% and the two-year yield up by 4 basis points to 5.06%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 0.5% higher for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.4%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was 0.5% higher to 1.0723.

European equity indices closed in the green. The SPDR DJ Euro STOXX 50 ETF  (NYSE:FEZ) rose 1.1%. 

Gold edged 0.6% up to $1,940/oz, while silver rose 1.5% to $23.54. Bitcoin (CRYPTO: BTC) was 0.2% lower to $27,173.

Staff writer Piero Cingari updated this report midday Thursday. 

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