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Stock market today: Wall Street drifts again ahead of Fed decision on rates

Statues adorn the facade of the New York Stock Exchange, Tuesday, Sept. 13, 2022, in New York. (AP Photo/Julia Nikhinson)

NEW YORK (AP) — Stocks are drifting again as Wall Street waits for the Federal Reserve’s latest decision on interest rates. The S&P 500 was off 0.2% early Tuesday. The Dow slipped 37 points and the Nasdaq composite was down 0.4%. Stocks have been see-sawing for weeks on uncertainty about whether the Fed is done with its market-shaking hikes to interest rates. By pulling its main rate to the highest level in more than two decades, the Fed has helped inflation to cool from its peak last year but at the cost of hurting prices for investments and damaging some corners of the economy.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street pointed modestly higher in cautious trading Tuesday ahead of the Federal Reserve’s upcoming decision on interest rates.

Futures for the Dow Jones Industrial Average and the S&P 500 were essentially flat, up less than 0.1% before the bell.

The Fed is gathering Tuesday for a two-day meeting before it announces its decision on where interest rates are going. In all likelihood, the Fed's benchmark rate will be left where it is. Japan's central bank will meet Thursday and Friday amid speculation it might gradually begin to adjust its longstanding negative interest rate policy.

Stocks have been see-sawing since early August on uncertainty about whether the Fed will finally end its hikes to interest rates. Higher rates have helped cool inflation from its peak last summer, but they also hurt prices for stocks and other investments while slowing the economy.

The Fed is expected to keep rates steady at its meeting this week. Attention will mainly focus on forecasts Fed officials will publish about where they expect interest rates, the economy and the job market to head in the near future.

Traders are betting on a roughly 40% chance the Fed will raise rates again in either November or December, according to data from CME Group.

But just as much attention will be on what Fed officials say about next year, when investors expect the Fed to begin cutting interest rates. Investors crave such cuts, which typically loosen up financial conditions and give boosts to financial markets. The big question is by how much the Fed could cut.

Rates may have to stay higher for longer to get inflation down to the Fed’s 2% target. That quest has been complicated by a recent spike in oil prices.

U.S. crude oil prices started rising in earnest in July. West Texas Intermediate crude, the U.S. measure, is up more than 13% for the year after gaining 48 cents Tuesday to $91.06 a barrel. A barrel was less than $70 in July. Brent crude, the international standard, rose 28 cents to $94.71 a barrel.

There has been no surge in demand for gasoline but early this month, Saudi Arabia and Russia agreed to extend a voluntary oil production cut through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices.

That not only plays out at the pump, but can increase costs for the production and transportation of goods just as inflation has started to cool.

In trading Tuesday, online grocery delivery company Instacart makes its market debut after raising $660 million in its initial public offering of 22 million shares at $30 apiece. Its shares are set to begin trading on the Nasdaq stock exchange under the stock symbol “CART.”

The pricing of the IPO gave Instacart a market value of around $10 billion, significantly lower than the $39 billion value placed on it in 2021.

Shares in Stitch Fix tumbled nearly 7% in premarket after the personalized online fashion retailer reported losing nearly 500,000 active users in the past year and forecast first-quarter revenue well below Wall Street estimates.

Elsewhere, in Asian trading, Japan’s Nikkei 225 dropped 0.9% to finish at 33,242.59. Australia’s S&P/ASX 200 lost 0.5% to 7,196.60. South Korea’s Kospi edged down 0.6% to 2,559.21. Hong Kong’s Hang Seng rose nearly 0.4% to 17,997.17, while the Shanghai Composite inched down less than 0.1% to 3,124.96.

In Europe at midday, France’s CAC 40 added 0.2%, Germany’s DAX fell 0.2% and Britain’s FTSE 100 was little changed, rising less than 0.1%.

In currency trading, the U.S. dollar rose to 147.69 Japanese yen from 147.58 yen. The euro cost $1.0708, up from $1.0691.


Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.

Yuri Kageyama And Matt Ott, The Associated Press

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