U.S. stocks rise as investors await Fed decision

By Sue Chang, Ryan Vlastelica
Published: Sep 26, 2018 12:41 pm ET


S&P 500 bounces back from a three-day decline

U.S. stocks rose modestly Wednesday, pushing key benchmarks back near all-time highs, though trading action remained muted as investors focused on a Federal Reserve decision that’s fully expected to deliver a rate increase in the afternoon.
Where are the major benchmarks trading?

The Dow Jones Industrial AverageDJIA+0.25% rose 61 points, or 0.2%, to 26,551. The S&P 500 SPX+0.27% gained 7 points, or 0.3%, to 2,922. The Nasdaq Composite Index COMP+0.34% added 27 points to 8,034, a move of 0.3% that could extend the index’s recent gains to a third straight session.

Read: Fed interest-rate hike today — a September rarity — could pressure stocks

At current levels, the Dow and the S&P 500 are both less than 1% from their all-time intraday peaks.
What’s driving the market?

Investors are looking ahead to a Fed policy decision that is seen as almost certain to deliver a quarter-percentage point interest-rate increase at 2 p.m. Eastern. The meeting will be followed a half-hour later by Fed Chairman Jerome Powell’s news conference during which investors are expected to seek further insight into the state of the economy, the impact of trade issues, and the path of future rate moves.

Read: Here’s how the Fed’s statement, dot plot and forecast may shift

See also: Why stock investors shouldn’t fear rising interest rates, in one chart

Stocks have recently seen modest weaknesson Fed days, and there could be additional volatility if Powell gives any commentary about the impact that trade policy is having on the economy.

Issues surrounding trade remained at the top of investors’ list of worries. While Wall Street has repeatedly ignored the threat of rising trade tensions, focusing instead on strong economic data and corporate fundamentals, trade jitters have led to short-term volatility on fears that the situation could spiral out of control.

Earlier this week, Chinese officials fired back against President Donald Trump, accusing him of “trade bullyism” and pushing an “America First” agenda at the cost of international relations. The comments came as the latest exchange of tariffs took effect—10% tariffs on $200 billion worth of Chinese goods, which was met with $60 billion in tariffs on U.S. goods by China.

In the latest economic data, new-home sales rose 3.5% in August, more than had been expected.
What are market analysts saying?

“With a rate rise today more or less a done deal, attention will be less on the fact that this will be the third rate rise this year, than on how the Fed sees the glide path for further policy actions,” said Michael Hewson, chief market analyst at CMC Markets UK.

“Today’s Federal Reserve meeting will be important in the context of the projections for future inflation and GDP forecasts, but also future expectations of how many more increases in the fed-funds rate we can expect to see between now and the end of next year,” he said.

What stocks are in focus?

Dow component Nike Inc. NKE-1.07% fell 1.5% after it late Tuesday reported fiscal 2019 first-quarter earnings that were above expectations but said its expenses increased.

International Business Machines Corp.IBM+2.46% shares rose 2.7% after UBS upgraded the stock to buy from neutral.

Alexion Pharmaceuticals Inc.’s ALXN+5.61% stock rallied 5.2% after the drug company agreed to buy Syntimmune for $1.2 billion, including potential milestone payments.

Worthington Industries Inc. WOR-7.78% skidded 7.9% after it reported first-quarter earnings and sales that missed expectations.

DowDuPont Inc. DWDP-1.14% shares shed 1.1% after the stock was downgraded by Instinet, which cited expectations of “noticeably lower commodity earnings” in the second half of the year.

Shares of Omnova Solutions Inc. OMN+0.98% edged up 0.2% after the company reported a third-quarter loss driven by asset write-downs related to the company’s strategic decision to exit from the commodity-coated paper market.
Where are other markets trading?

Shares in Asia were broadly higher, with Hong Kong’s Hang Seng Index up more than 1% while Japan’s Nikkei rose for seven straight sessions. Major European markets were also modestly higher.

Crude oil CLK9-0.48% fell in a slight retreatfrom a recent rally that has taken prices up about 2% this week while gold pricesGCM9-0.56% were also down. The U.S. Dollar index DXY+0.13% edged higher.

See original version of this story