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U.S. stocks are wobbling as investors await Fed's interest rate decision

AuthorLiz Moyer
Published 05/03/2023, 10:07 AM
Updated 05/03/2023, 11:54 AM
© Reuters.

Investing.com -- U.S. stocks were wobbling ahead of the Federal Reserve’s announcement about interest rates later today.

At 11:51 ET (15:51 GMT), the Dow Jones Industrial Average was down 42 points or 0.1%, while the S&P 500 was flat and the NASDAQ Composite was up 0.2%.

Stocks sank on Tuesday in anticipation of the decision, which many expect to be another increase to the benchmark interest rate, by a quarter of a percentage point. The Fed is still fighting inflation despite signs that the economy is weakening.

At the same time, regional banks have been in turmoil amid a crisis of confidence in the banking system, though shares are rebounding on Wednesday. PacWest Bancorp (NASDAQ:PACW) shares are up 3.6%, while shares of Western Alliance Bancorporation (NYSE:WAL) are up 3.4%.

While the Fed is expected to raise rates today, the expectation is it will pause at its June meeting to assess the effects of its actions so far to tame inflation. It wants to see strong evidence that inflation is heading back to its 2% target rate.

The labor market is another factor the Fed is weighing. Earlier this morning, the ADP private payroll report showed the economy added more jobs than expected in April. A more comprehensive report on jobs last month is due out on Friday.

Data on the services sector, the ISM non-manufacturing PMI, came in slightly stronger than expected at 51.9 versus 51.8 forecasted.

Shares of Advanced Micro Devices (NASDAQ:AMD) fell 8.7% after saying current quarter sales could be below expectations. Eli Lilly and Company (NYSE:LLY) shares rose 4% after tests showed its Alzheimer's treatment slowed the progression of the disease.

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Kraft Heinz Co. (NASDAQ:KHC) shares rose 4.5% after the macaroni and cheese maker raised its full-year profit outlook after beating first quarter expectations.

Latest comments

Wobbling? All indicies are up... R2000 even massive 1,6% up. It's like they are waiting for Christmas Eve. Nice things coming from Santa Powell. Pivot and all kind of pleasant gifts.
Market can wobble up or wobble down.
many rate hike be there also debt default looms. and 50% deposit In small banks and crises. omg dow will jump 1000 point. buy buy
New format kinda sucks. I cant fit all the commodities on the screen page any more without having to scroll. It was much moreconvenient when I could see everything on one page.
25bps
The 25 bps hike has been priced in for some time. What are these fools writing about?
Yes!
Make sure you close some positions and take profit 🔥🔥🔥
Yes today profit $3000😉😉😉
Lools like the bears are out praying for calamity so they can recover their loses 😂
ha ha ha 😂
let's talk in October
Fed today
whats the fuss on the volatility when it is well expected for a 0.25 hike?
because the real news is wether they'll pause or not
A PAUSE? no jajajaja
nobody is going to use Chinese or Russian currencies as reserve. the dollar may be down, but it is well established.
USA seems like a greater control freak than those two.. World is choosing between the lesser of two evils.. US or China.. Let's see how it goes
  The CCP's great firewall & social credit systems are so not evil! </sarc>
"Russian authorities have blocked or deleted some 138,000 websites since Moscow launched its invasion of neighboring Ukraine in February, the country’s prosecutor general said ..." --  .themoscowtimes.com, Aug 2022.  Just calling it a "war" instead of "special operation" gets a website blocked/deleted.
Inflation from June 2022 to Mar 2023 is a mere 1.86% ... why does the Fed need to raise rates again and further risk the banking industry?
That's not the way it's calculated. You don't just subtract one from the other. it's been compounding every month
Not the last time I checked. Powell will have to raise Interest Rates if he expects other countries to show up at the next Treasury Bond Auction. Someone needs to pay our huge Entitlement Programs. See who blinks first at Sleepy Joes meeting next week.
The Fed will raise interest rate.  That's been the market's expectation and  the Fed respects that.
the Fed will raise rates at the peril and risk of yet more banks failing with commercial real estate unable to renew their mortgages at such higher rates
because both economies exist in an authoritarian state, the Chinese and Russian economic statistics are unreliable, .......because of western sanctions, and incompetency and corruption, both economies and social systems are in danger of collapses....
Russia has no debt. China is the manufacturing center of the world. USA is about to go bankrupt and default on its debt meanwhile inflation is soaring and banks are collapsing. Tell me how these countries are worse off?
  The USA is 2nd in manufacturing.
powell is useless , liberal government is beyond inept.
Maybe Powell & other Fed members have been gun-shy about raising rates because Trump threatened to fire them.  We should understand eroding Fed independence has negative consequences for the country.
no need to raise during trump, inflation was almost non existent. Biden caused the inflation and now the fed is forced to do clean up
evidence he caused inflation? of course not. I disagree with trumps spending on the pandemic but that's what the democrats put forth for him and was in a lose lose position because of the fear mongering from the left. It was Bidens war on oil and spending packages, while not in a pandemic. 100% Biden flation
The USA and western financialized debt consumption “economy” is collapsing on its own. China and Russia didnt have to fire a single shot.
Overvalued stocks are rising in value.
As usual 18 x overvalued
dow must jump 1000 point. 50% us deposit in small banks. wow..
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