Investing.com — Stocks on Wall Street hovered around both sides of the flatline on Wednesday as investors hunkered down before a landmark Federal Reserve decision that is likely to result in the first interest rate cut since March 2020.
By 09:53 ET (13:53 GMT), the benchmark S&P 500 was mostly unchanged, the tech-heavy Nasdaq Composite had gained 26 points or 0.2%, and the 30-stock Dow Jones Industrial Average had slid by 93 points or 0.3%.
Markets see greater chance of 50 bps cut
The Fed is widely expected to bring borrowing costs down from a more than two-decade high of 5.25% to 5.5% following its latest two-day gathering.
The CME Group’s closely-monitored FedWatch Tool showed traders pricing in a 61% chance for a 50-basis point cut and a 39% chance for a 25-basis point reduction.
However, analysts at ING said the decision is still a “close call.” In the final data point before the announcement, US retail sales unexpectedly rose in August, pointing to consumer resilience and broader economic strength.
Such trends, along with mixed recent inflation figures and cooling labor demand, could further complicate matters for Fed officials.
Along with the projected cut, the Fed will also release an updated look at policymakers’ rate projections, possible changes to its official statement, and a press conference with Chair Jerome Powell.
Traders will likely be hunting for any insight into how the Fed plans to approach a possible easing cycle, with markets currently expecting at least 100 basis points in cuts by the end of 2024.
U.S. Steel rises on report of Nippon Steel deal extension
Among major stock movers, shares in United States Steel (NYSE:X) climbed after Bloomberg News reported that Nippon Steel had won an extension in the review of its $14.1 billion approach for the American steelmaker.A decision is now likely to be made only after the 2024 elections in November.
Elsewhere, all seven of the independent directors on the board of 23andMe Holding Co (NASDAQ:ME) resigned on Tuesday. The directors said they had not received a satisfactory take-private offer from the company’s Chief Executive Anne Wojcicki. Shares in the company are trading slightly higher after slipping in premarket trade.
(Ambar Warrick contributed reporting.)