Stocks aim to shake off Evergrande blues as traders digest Fed move

Shares rose on Wednesday as investors considered the Federal Reserve’s latest monetary policy decision after a volatile start to the week.

All three major indexes contributed to the gains after the 2 p.m. ET monetary policy decision. The Dow Jones gained more than 500 points, or 1.5%, while the S&P 500 and the Nasdaq also each jumped more than 1.3%.

For markets, the Fed’s latest move was one of the highlights of this week. He redirected attention to national monetary policy, after fears about the fallout from a possible default by Chinese real estate giant China Evergrande triggered the worst day for actions since May on Monday.

The monetary policy statement and subsequent press conference by Fed Chairman Jerome Powell on Wednesday afternoon laid the groundwork for a short-term announcement and the start of the reduction in the asset purchase program of the Fed in times of crisis, which currently includes purchases of $ 120 billion per month in agency mortgages. – Securities backed by US Treasury securities.

In its Wednesday afternoon statement, the Fed said that if economic progress continues “largely as expected, the Committee believes that moderation in the pace of asset purchases may soon be warranted.” The language served as an update to the central bank’s statement at the last meeting in July, which only mentioned that the FOMC “would continue to assess progress in future meetings.”

The anticipation of the cut has been a source of consternation for market participants in recent months as the central bank intensified its talks on starting the removal of one of the main sources of support for the economy. hit by the pandemic.

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The political decision was also accompanied by an updated set of economic projections by members of the Federal Open Market Committee (FOMC), including a first look at their expectations for 2024. A growing number of FOMC members have advanced their planned timeline for raising interest rates from their current near zero levels, given recent progress in the recovery economic.

Based on the new projections, the FOMC’s dot plot, or interest rate expectations graph, suggested that the committee is now split on rate hikes for next year, with 9 committee members not. seeing no rate hike by the end of 2022, while 9 members see at least one interest rate hike. Previously, the midpoint indicated that no rate hike would take place until 2023.

Meanwhile, FedEx (FDX) Stocks fell after the shipping giant posted weaker-than-expected quarterly earnings as supply chain disruptions and labor shortages weighed on results. Dow Shares in Disney (SAY), meanwhile recovered Tuesday’s losses after CEO Bob Chapek posted a weaker-than-expected outlook for streaming subscribers and said he expected production delays to affect the results of the current quarter at a Goldman Sachs conference.

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2:12 pm ET: Stocks Extend Gains After Fed Signals May Come “Soon”

All three major indices jumped Wednesday afternoon after the Federal Reserve’s monetary policy decision in September and updated economic projections.

In addition to the new dot plot, the Fed also released new outlook on economic growth and inflation. The central bank now expects real GDP to grow 5.9% in 2021, down from the 7.0% the Fed predicted after its June meeting. The unemployment rate is also expected to end the year at 4.8%, based on the FOMC median projection. And basic personal consumption spending – the Fed’s preferred inflation indicator – is expected to rise 4.2% in 2021 before slowing to a 2.2% increase in 2022. These have been revised to the increase from increases of 3.4% and 2.1%, respectively, seen in June. .

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12:14 p.m. ET: Stocks extend gains above 1% as traders seek to end S&P 500 four-day losing streak

Here’s where the markets were trading on Wednesday afternoon:

• S&P 500 (^ GSPC): 4,3403.42, +49.23 (+ 1.13%)

• Dow (^ DJI): 34,346.46, + 426.62 (+ 1.26%)

• Nasdaq (^ IXIC): 14,896.03, + 149.24 (+1.03%)

• Raw (CL = F): $ 71.70 per barrel, + $ 1.21 (+ 1.72%)

• Gold (CG = F): $ 1,779.00 per ounce, + $ 0.80 (+ 0.04%)

• 10-year cash flow (^ TNX): -1.2 bps for a yield of 1.314%

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10 a.m. ET: housing activity cools off

Existing home sales fell 2% to 5.88 million seasonally adjusted units in August a month earlier, according to National Association of Real Estate Agents (NAR). July sales were revised slightly upwards to 6 million units. The results exceeded analysts’ expectations of a 1.7% drop, according to Bloomberg consensus estimates. The decline was expected since pending house sale – a leading indicator of real sales – has fallen for two consecutive months, in July and June.

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9:30 a.m. ET: Stocks open higher after tough 2-day run

Here are the main movements in the markets at the opening bell:

• S&P 500 (^ GSPC): 4.374.65, +20.46 (+ 0.47%)

• Dow (^ DJI): 34,145.70, +225.86 (+ 0.67%)

• Nasdaq (^ IXIC): 14,790.05, +43.65 (+ 0.30%)

• Raw (CL = F): $ 71.65 per barrel, + $ 1.16 (+ 1.65%)

• Gold (CG = F): $ 1,773.90 per ounce,-$ 4.30 (-0.24%)

• 10-year cash flow (^ TNX): flat to yield 1.3240%

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7:45 a.m. ET Wednesday: Stock futures advance ahead of Fed move

Here’s where the markets were trading before the opening bell:

• S&P 500 Futures Contracts (ES = F): +23.75 points (+ 0.55%), at 4,367.00

• Dow Futures (YM = F): +197.00 points (+ 0.58%), at 33,995.00

• Nasdaq Futures (NQ = F): +45 points (+ 0.3%) at 15,069.00

• Raw (CL = F): $ 71.50 per barrel, +1.01 $ (+1.43%)

• Gold (CG = F): $ 1,773.50 per ounce,-$ 4.70 (-0.26%)

• 10-year cash flow (^ TNX): +1.4 bps for a yield of 1.338%

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6:15 p.m. ET Tuesday: Stock futures are mixed after massive sell-off

Here are the main movements on the markets as of Tuesday evening:

• S&P 500 Futures Contracts (ES = F): -4.75 points (-0.11%), to 4,338.5

• Dow Futures (YM = F): -37 points (-0.11%), to 33,761.00

• Nasdaq Futures (NQ = F): -31 points (-0.21%) to 14,993.00

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter