The S&P 500 ended 0.03% higher at 5,634.58, the DJIA declined 0.04%, to 41,606.18, while the Nasdaq Composite ended 0.20% higher at 17,628.06
U.S. stock markets closed nearly flat after reaching record highs on Tuesday and the dollar stood firm as strong economic data eased slowdown concerns and investors prepared for the Fed’s expected move to cut interest rates for the first time in over four years.
Signs of a slowing job market over the summer and more recent media reports had contributed in the past week to betting the Fed would move more drastically than usual at its meeting on Wednesday and cut half a percentage point, to head off any weakness.
Data on Tuesday showed U.S. retail sales increased in August and production at factories rebounded. Stronger data could theoretically weaken the case for a more aggressive cut.
That points to a healthy state of the economy, according to Peter Cardillo, chief market economist at Spartan Capital Securities. He expects Fed Chair Jerome Powell to reduce rates by 25 bps on Wednesday, and would be looking for clues to future moves.
He might hint the Fed could be more aggressive in the coming meetings. I think they start off being cautious, Cardillo added.
Across the wider market, traders are still betting on a 63% chance that the Federal Reserve will reduce rates by 50 bps on Wednesday and a 37% chance of a 25 bps cut, as per CME Group’s FedWatch tool.
The S&P 500 advanced to an all-time intraday high at one point in the session, but flattened in afternoon trading and ended 0.03% higher at 5,634.58. The DJIA declined 0.04%, to 41,606.18.
The tech-heavy Nasdaq Composite bucked the Wall Street trend to end 0.20% higher at 17,628.06, while MSCI’s All-World index added 0.04% to 828.72.
What you are seeing in this afternoon’s trading is the way we pulled off of the all-time high because tomorrow somebody’s going to be disappointed, according to Russell Price, chief economist at Ameriprise Financial Services.
