Sunday, July 14, 2024

Stock market today: Wall Street drifts as the wait begins for the Federal Reserve

by Associated Press

NEW YORK (AP) — U.S. stocks are drifting Tuesday as Wall Street waits to hear what the Federal Reserve will say about where it’s taking interest rates.

The S&P 500 was 0.1% lower in late morning trading. The Dow Jones Industrial Average was up 133 points, or 0.3%, as of 10:45 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.

Falling technology stocks weighed on the market as some of Wall Street’s mania around artificial-intelligence technology cooled.

Nvidia, whose chips are powering much of the move into AI, dropped 2% after unveiling new products at its developers’ conference. Analysts called them powerful and said they would keep Nvidia ahead of competitors, but its stock had already shot up more than 240% over the prior year.

Super Micro Computer, whose stock went from less than $100 to more than $1,000 in a year, sank 10.6%. The seller of server and storage systems used in AI and other computing, said it’s looking to sell 2 million shares of its stock.

Shares of Unilever that trade in the United States rose 2.9% after it said it was spinning off Ben & Jerry’s and its ice cream business, while cutting 7,500 jobs.

Elsewhere on Wall Street, the focus was on the Federal Reserve.

The Fed is beginning its latest meeting on interest rates, and it will announce its decision on Wednesday. The widespread expectation is for it to leave its main interest rate alone at a two-decade high. The hope is that it will indicate it still expects to cut rates three times later this year, as it hinted a few months ago.

U.S. stock indexes have set records recently partly on hopes for such cuts, which would relieve pressure on the economy and financial system. But recent reports on inflation have consistently been coming in worse than expected. That could force the Fed to say it will deliver fewer rate cuts this year, and traders have already given up earlier expectations that the year’s first cut would arrive Wednesday.

Strategists at Bank of America expect Fed officials to stick with forecasts showing the median member still expects three cuts in 2024. But it’s a close call, and “risks skew to fewer cuts signaled,” according to the strategists led by Mark Cabana.

Treasury yields eased in the bond market ahead of the announcement. The yield on the 10-year Treasury slipped to 4.30% from 4.33% late Monday.

High yields and interest rates can hurt prices not only for stocks but also for cryptocurrencies.

Bitcoin’s price has been sliding since hitting a peak above $73,000 last week. It’s notorious for taking investors through severe swings in price, and it fell another 7% to drop below $62,900.

In stock markets abroad, Japan’s Nikkei 225 rose 0.7% after the Bank of Japan hiked its benchmark interest rate for the first time in 17 years. In a historic move, it moved the rate back to a range of zero to 0.1% and made other changes, ending a long experiment of rates below zero meant to boost the economy and inflation.

The era-defining move was widely expected, and it still keeps interest-rate policies easy, analysts said.

Stocks fell 1.2% in Hong Kong and 0.7% in Shanghai after Troubled property developer China Evergrande Group said Beijing’s market watchdog fined it 4.2 billion yuan ($333.4 million) for allegedly falsifying its revenue, among other violations.

Stocks were mixed elsewhere in Asia and Europe.

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