In anticipation of the Federal Reserve’s upcoming meeting on interest rates, US stocks remained relatively unchanged during quiet Monday trading on Wall Street. The S&P 500 saw a small increase of 0.1% or 3.21 points, reaching 4,453.53, following its second consecutive week of losses. The Dow Jones Industrial Average rose less than 0.1% or 6.06 points to 34,624.30, while the Nasdaq composite gained less than 0.1% or 1.90 points, closing at 13,710.24. U.S. crude oil rose to $91.48 per barrel, up significantly from just under $70 in July. Ford and General Motors saw declines of 2.1% and 1.8%, respectively, as a limited strike by the United Auto Workers continued for another day, according to the AP.
Energy producer stocks played a significant role in leading the market due to the increase in oil prices. Exxon Mobil rose by 0.8%, while Marathon Petroleum saw a 1.6% increase. However, Clorox suffered a 2.4% drop after a cybersecurity attack caused widespread disruptions to its operations. While the extent of the damage is still being assessed, Clorox expects it to have a significant impact on its upcoming results. The company also mentioned that it believes the unauthorized activity has been contained.
As the Federal Reserve’s meeting concludes this week, it is widely expected that interest rates will remain unchanged. Market focus will be on the forecasts published by Fed officials regarding their expectations for interest rates, the economy, and the job market in the coming years. One of the key points of interest will be the officials’ projections for the main interest rate to rise this year. According to data from CME Group, traders are currently betting on a roughly 40% chance of rate hikes in either November or December.
Another significant aspect to watch for is the Fed’s commentary on next year when investors anticipate interest rate cuts to begin. These cuts typically have a positive effect on financial markets by loosening up financial conditions. The question on everyone’s mind is how much the Fed will cut rates. Economists at Goldman Sachs predict that next year, after one more rate hike to a range of 5.50% to 5.75% this year, the Fed could implement a full percentage point of cuts.
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