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Wall Street flinches ahead of Fed decision

Democrats and Republicans in Washington are in the final two weeks of negotiations before the November 3 presidential election on new spending measures to boost the US economy after the coronavirus pandemic caused grievous damage earlier in the year.


Democrats and Republicans in Washington are in the final two weeks of negotiations before the November 3 presidential election on new spending measures to boost the US economy after the coronavirus pandemic caused grievous damage earlier in the year.

  • Major US indices opened lower on Wednesday as Wall Street looked ahead to the Federal Reserve’s meeting later in the day.
  • Traders have been spooked by the possibility that massive stimulus spending enacted in Washington could cause prices to rise.
  • After markets opened, the tech-rich Nasdaq Composite Index had fallen 1.2%, while the broad-based S&P 500 had lost 0.4%.

Major US indices opened lower on Wednesday as Wall Street looked ahead to the conclusion of the Federal Reserve’s meeting later in the day, when central bankers could comment on inflation.

Traders have been spooked in recent sessions by the possibility that massive stimulus spending enacted in Washington could cause prices to rise.

Those concerns have sent bond yields up and tech stocks down as traders moved into growth stocks, a dynamic that repeated itself in early trading.

About 20 minutes after markets open, the tech-rich Nasdaq Composite Index had fallen 1.2% to 13 309.84, while the broad-based S&P 500 had lost 0.4% to 3 947.27.

The benchmark Dow Jones Industrial Average was up 0.3% at 32 923.27.

Charles Schwab investment bank said traders were “fence-sitting” ahead of the end of the Fed meeting, where the central bank will likely weigh in on the trends that have caused stocks to oscillate in recent weeks.

“The Fed’s statement will be followed by updated economic projections and Fed Chairman (Jerome) Powell’s customary press conference, which will likely gain heightened scrutiny given the backdrop of rising inflation expectations,” Schwab wrote.

Also on investors’ mind was Commerce Department data released before markets opened showing new home construction and permits plunged in February, but that was widely viewed as a consequence of bad weather.

Stocks that would benefit from the economy’s reopening after Covid-19 rose in early trading, with Boeing gaining 1.6% and Carnival Cruise Line 0.9%.


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