Markets Trade Cautiously Ahead of Pivotal Fed Meeting

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Federal Reserve Meeting

live Updates July 26, 2023, 12:45 p.m. ET

What to Expect

Rate Increases, Explained

Is Recession Still a Risk?

Credit Markets Create Uncertainty

LIVE See more updates: Federal Reserve Meeting July 26, 2023, 12:45 p.m. ET

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Stock markets often exhibit caution ahead of major events like Fed meetings, waiting until there is clarity over the central bank’s next move.

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S&P 500

July 24

July 25

July 26

4,545

4,550

4,555

4,560

4,565

4,570

4,575

Data delayed at least 15 minutes

Source: FactSet

By: Ella Koeze

By Joe Rennison

July 26, 2023 Updated 12:36 p.m. ET

Stock markets slipped on Wednesday morning, as cautious investors parsed mixed earnings reports and prepared for the Federal Reserve to resume raising interest rates.

The S&P 500 fell 0.2 percent ahead of the Fed’s announcement. The index has gained nearly 20 percent since the start of the year, but the rally has slowed this month from its earlier breakneck pace.

The Dow Jones industrial average, a collection of 30 stocks that are intended to track the broader economy, was on course for a 13th consecutive day of gains, posting a small gain in early trading Wednesday.

Stock markets often exhibit caution ahead of major events like Fed meetings, waiting until there is clarity over the central bank’s next move.

Mixed earnings from some of the big technology companies that dominate stock indexes also weighed on the market Wednesday, with Microsoft, which is one of two companies in the S&P 500 valued at over $2 trillion, dropping more than 3 percent.

The technology-heavy Nasdaq Composite index fell 0.3 percent.

Despite the Fed seeking to engineer a gentle economic slowdown, easing inflation by raising interest rates, the economy has proved resilient. Unemployment remains low, corporate profitability has been dented but not destroyed and household budgets are in better shape than expected.

Although inflation has slowed, investors and analysts expect Fed officials to emphasize that their job is not yet over, meaning rates could rise further, or at least remain high for a prolonged period, squeezing companies and consumers.

Investors have in recent days ramped up bets on the Fed raising interest rates by an additional quarter of a percentage point later this year, and will be listening to comments from the Fed chair, Jerome H. Powell, for signs of this in his thinking.

“The U.S. Federal Reserve is not yet declaring a cease-fire with its battle on inflation,” Henk Potts, a market strategist at Barclays Private Bank, noted on Wednesday morning.

Joe Rennison covers financial markets and trading, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders. More about Joe Rennison

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Federal Reserve Meeting. live Updates July 26, 2023, 12:45 p.m. ET. What to Expect. Rate Increases, Explained. Is Recession Still a Risk? Credit Markets Create Uncertainty. LIVE See more updates: Federal Reserve Meeting July 26, 2023, 12:45 p.m. ET. Advertisement. SKIP ADVERTISEMENT. Stock markets often exhibit caution ahead of major events like Fed meetings, waiting until there is clarity over the central bank’s next move. Give this article. S&P 500. July 24. July 25. July 26. 4,545. 4,550. 4,555. 4,560. 4,565. 4,570. 4,575. Data delayed at least 15 minutes. Source: FactSet. By: Ella Koeze. By Joe Rennison. July 26, 2023 Updated 12:36 p.m. ET. Stock markets slipped on Wednesday morning, as cautious investors parsed mixed earnings reports and prepared for the Federal Reserve to resume raising interest rates. The S&P 500 fell 0.2 percent ahead of the Fed’s announcement. The index has gained nearly 20 percent since the start of the year, but the rally has slowed this month from its earlier breakneck pace. The Dow Jones industrial average, a collection of 30 stocks that are intended to track the broader economy, was on course for a 13th consecutive day of gains, posting a small gain in early trading Wednesday. Stock markets often exhibit caution ahead of major events like Fed meetings, waiting until there is clarity over the central bank’s next move. Mixed earnings from some of the big technology companies that dominate stock indexes also weighed on the market Wednesday, with Microsoft, which is one of two companies in the S&P 500 valued at over $2 trillion, dropping more than 3 percent. The technology-heavy Nasdaq Composite index fell 0.3 percent. Despite the Fed seeking to engineer a gentle economic slowdown, easing inflation by raising interest rates, the economy has proved resilient. Unemployment remains low, corporate profitability has been dented but not destroyed and household budgets are in better shape than expected. Although inflation has slowed, investors and analysts expect Fed officials to emphasize that their job is not yet over, meaning rates could rise further, or at least remain high for a prolonged period, squeezing companies and consumers. Investors have in recent days ramped up bets on the Fed raising interest rates by an additional quarter of a percentage point later this year, and will be listening to comments from the Fed chair, Jerome H. Powell, for signs of this in his thinking. “The U.S. Federal Reserve is not yet declaring a cease-fire with its battle on inflation,” Henk Potts, a market strategist at Barclays Private Bank, noted on Wednesday morning. Joe Rennison covers financial markets and trading, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders. More about Joe Rennison. Give this article. Advertisement. SKIP ADVERTISEMENT.