US stocks wavered Wednesday ahead of the Federal Reserve’s interest-rate decision.
The S&P 500 gained less than 0.1% in early New York trading. The tech-focused Nasdaq Composite Index slipped 0.1% while the Dow Jones Industrial Average was roughly flat.
Fed officials are widely expected to announce Wednesday afternoon that they are raising interest rates by a half percentage point and approving plans to start shrinking the central bank’s $9 trillion asset portfolio next month.
The moves are part of a double-barreled effort to slow the economy and ease inflation, which is running at a four decade high. With stocks and bonds on shaky footing as of late, many investors are questioning whether the Fed will be able to carry through its planned course of interest-rate increases without further unsettling markets. Investors will get a chance to hear from Fed Chairman Jerome Powell Wednesday afternoon when he addresses reporters after the conclusion of the central bank’s policy meeting.
“This is the question markets are dealing with: Where is the Fed going? Is it really this series of rate hikes going to 5% or 6% that will end in the cooling of the economy?” said Carsten Brzeski, ING Groep’s global head of macro research.
Private sector employment increased by 247,000 jobs from March to April, according to the ADP National Employment Report. A tight labor market could amplify economists’ concerns that the labor market is overheating, with job and wage growth rising to levels that may keep inflation above the central bank’s 2% target.
Investors were also monitoring earnings for signs of whether inflation is eating away at profits or weighing on consumer spending.
In individual stocks, Airbnb shares rose 6.1% after the company said it expects to post its first full-year net profit this year.
Starbucks shares added 5.6% after the coffee chain said profits and sales grew in the most recent quarter.
Lyft shares slumped 28% after the ride-hailing company said it would invest in the current quarter to ensure adequate driver supply and grow its ride-hailing platform, spooking investors as the spending weighs on operating profit.
Federal Reserve Chairman Jerome Powell indicated on Thursday that the central bank was likely to raise interest rates by a half percentage point at its meeting in May. Photo: Samuel Corum/Getty Images
Shares of Tupperware Brands plummeted 35% after the company posted an earnings miss and with draft guidance for the year.
was up 6.2% after the chip-maker reported record sales after Tuesday’s close.
In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 2.984% from 2.957% Tuesday. Bond yields and prices move in opposite directions.
In commodities, Brent-crude futures prices rose 4.2% to $109.38 a barrel. Concerns about reduced energy supply stemming from Russia’s war against Ukraine have kept prices elevated in recent months. The European Union proposed to ban on imports of Russian crude oil within six months and a ban on refined oil products by year-end, European Commission President Ursula von der Leyen said Wednesday.
Traders worked on the floor of the New York Stock Exchange on Monday.
Photos:
Spencer Platt/Getty Images
Overseas, the pan-continental Stoxx Europe 600 fell 0.4%. Hong Kong’s Hang Seng fell 1.1%, and South Korea’s Kospi edged down 0.1%. Markets in mainland China and Japan were closed for a holiday.
—Akane Otani contributed to this article
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
.
