Key Takeaways
- • U.S. stocks edged higher ahead of the Federal Reserve's rate decision, with the S&P 500 up 0.2% and the Nasdaq Composite up 0.4% in early Wednesday trading, according to the AP and BNN Bloomberg reports.
- • Brent crude rose almost 2% to US$111.38 a barrel and U.S. benchmark crude gained more than 2% after an attack on a major Saudi Arabian refinery by Iran-backed Houthi rebels, intensifying inflation pressure on the Fed.
- • Markets widely expect the Fed to hold its benchmark rate steady after its first hike in three years last month, while the 10-year Treasury yield edged up 0.25% to 5.0%.
- • SK Hynix jumped 11.4% after reporting a record operating profit of 83.3 trillion won (US$62.8 billion) for the last quarter, up nearly sevenfold year over year.
- • Robinhood fell sharply after quarterly profit missed expectations, while Stellantis rose 6% after reaffirming its annual guidance.
Summary
U.S. equities were drifting higher on Wednesday ahead of the Federal Reserve's afternoon interest rate announcement. The S&P 500 rose 0.2% early in the session, the Dow Jones Industrial Average added 44 points, and the Nasdaq Composite gained 0.4%. The Fed raised its main rate last month for the first time in three years in an effort to curb high inflation, and the consensus on Wall Street is that it will keep rates unchanged this time. Investors will focus on any guidance the Fed offers on the future direction of rates.
Energy prices remained a central concern. Benchmark U.S. crude rose more than 2% early Wednesday after an attack on a major Saudi Arabian refinery by Iran-backed Houthi rebels earlier in the week. Brent crude, the international standard, was up almost 2% at US$111.38 a barrel. Higher energy costs from the Middle East conflict are complicating the Fed's inflation fight.
Tech stocks had surged during the week, with the Nasdaq up about 2% for the week before Wednesday's trading, fueled by easy access to credit. Hyperscalers including Microsoft and Alphabet were scheduled to report quarterly earnings after the bell, with Amazon and Intel reporting Thursday. Alphabet was up almost 2% early and Microsoft was essentially flat. Memory chipmaker SK Hynix jumped 11.4% to its highest level in two weeks after reporting a record operating profit of 83.3 trillion won, beating market estimates. In other corporate moves, Robinhood fell sharply after quarterly profit fell short of expectations, and Stellantis gained 6% after holding its annual guidance despite heavy turnaround costs.
Abroad, Germany's DAX edged up less than 0.1%, France's CAC 40 fell 0.1%, and Britain's FTSE 100 declined 0.3%. South Korea's Kospi surged 6.6% to close at 6,012.44. The Bank of Japan began a two-day policy meeting Thursday, with markets expecting its benchmark rate to be unchanged. The 10-year Treasury yield, a key inflation gauge for the Fed, rose 0.25% to 5.0%, and the dollar slipped to 157.92 yen.
Energy prices remained a central concern. Benchmark U.S. crude rose more than 2% early Wednesday after an attack on a major Saudi Arabian refinery by Iran-backed Houthi rebels earlier in the week. Brent crude, the international standard, was up almost 2% at US$111.38 a barrel. Higher energy costs from the Middle East conflict are complicating the Fed's inflation fight.
Tech stocks had surged during the week, with the Nasdaq up about 2% for the week before Wednesday's trading, fueled by easy access to credit. Hyperscalers including Microsoft and Alphabet were scheduled to report quarterly earnings after the bell, with Amazon and Intel reporting Thursday. Alphabet was up almost 2% early and Microsoft was essentially flat. Memory chipmaker SK Hynix jumped 11.4% to its highest level in two weeks after reporting a record operating profit of 83.3 trillion won, beating market estimates. In other corporate moves, Robinhood fell sharply after quarterly profit fell short of expectations, and Stellantis gained 6% after holding its annual guidance despite heavy turnaround costs.
Abroad, Germany's DAX edged up less than 0.1%, France's CAC 40 fell 0.1%, and Britain's FTSE 100 declined 0.3%. South Korea's Kospi surged 6.6% to close at 6,012.44. The Bank of Japan began a two-day policy meeting Thursday, with markets expecting its benchmark rate to be unchanged. The 10-year Treasury yield, a key inflation gauge for the Fed, rose 0.25% to 5.0%, and the dollar slipped to 157.92 yen.
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