U.S. stocks experienced a surge on Wednesday as market participants eagerly anticipated the Federal Reserve’s forthcoming decision on interest rates.
As of 11:10 ET (15:10 GMT), the Dow Jones Industrial Average registered a gain of 212 points or 0.6%, while the S&P 500 saw an increase of 0.7%, and the NASDAQ Composite showed a rise of 0.9%.
The primary indices on Wall Street closed the month on an upward trajectory, striving to recover from a challenging October.
During the previous month, the blue-chip Dow declined by 1.4%, and the broad-based S&P experienced a 2.2% drop, marking their first three-month decline since March 2020. The tech-heavy NASDAQ fell by 2.8%, recording its most challenging October since 2018.
Focus on Fed’s Policy Decision
Investors have been apprehensive about the possibility of the Federal Reserve maintaining interest rates at elevated levels, potentially for a longer duration than initially anticipated. This concern has been amplified by last week’s robust third-quarter economic growth estimates.
The U.S. central bank will conclude its latest two-day policy meeting later in the session. It is widely anticipated that the Fed will keep rates steady. All eyes will be on Chair Jerome Powell’s remarks, as investors meticulously analyze every word to discern whether another interest rate hike might be in the offing later this year.
ADP Payrolls Fall Short of Expectations Ahead of Key Friday Report
Wednesday saw a slew of economic releases, including the October ADP private sector payrolls, which came in at 113,000, slightly below expectations but still stronger than the previous reading. September JOLTS job openings surpassed expectations at 9.55 million.
These figures precede Friday’s jobs report, which will provide the Fed and investors with a comprehensive assessment of the state of the still-constrained labor market.
Additionally, investors will be monitoring the nation’s future refinancing plans, as yields remain near historic highs, even after the Treasury projected a lower fourth-quarter borrowing requirement than previously indicated.
Earnings Season in Full Swing
Several companies are slated to disclose their earnings, including fintech giant PayPal (NASDAQ: PYPL) and accommodation-sharing platform Airbnb (NASDAQ: ABNB). Norwegian Cruise Lines exceeded profit projections but indicated fourth-quarter results below expectations, citing operational disruptions from external events, including the Middle East conflict. This led to a 1.6% decline in shares.
Advanced Micro Devices (NASDAQ: AMD) witnessed a more than 7% surge in stock price after the chipmaker projected fourth-quarter revenue and gross margins below Wall Street’s estimates.
On the other hand, Match Group (NASDAQ: MTCH) experienced a 17% drop in stock price after the parent company of the Tinder dating app provided revenue guidance for the fourth quarter that fell short of expectations.
Oil Prices Rise Ahead of Fed Decision
Oil prices saw an uptick on Wednesday in cautious trading ahead of the conclusion of the latest Fed meeting. Traders also kept a close watch on the latest developments in the Israel-Hamas conflict.
Data from the American Petroleum Institute, released on Tuesday, indicated a rise in U.S. oil inventories by 1.3 million barrels last week, slightly lower than anticipated.
Official data from the Energy Information Administration is expected later in the session.
