Fed Rate Hike Expected as Wall Street Waits with Bated Breath

Wall Street is holding steady ahead of the Federal Reserve's interest rate decision, with traders expecting a hike to combat high inflation. The S&P 500 rose 0.2% on Wednesday, its second gain in eight days, while the Dow Jones Industrial Average was down 42 points and the Nasdaq composite gained 0.5%. Oil prices eased slightly, falling 1.1% to $107.59 per barrel, which helped send the yield on the 10-year Treasury down to 4.97% from 5.00%.

The pressure remains high, however, with Brent oil still above its pre-war price of $72 and the 10-year yield at a level not seen since 2023. Traders expect the Fed to raise interest rates later in the day, which would make borrowing more expensive and slow the economy. This move is expected to help reduce inflation, but it could also undercut stock prices.

The European Central Bank has already hiked rates across the Atlantic to combat inflation, and a report on Wednesday morning showed that US retailers saw a surge in spending last month, which could embolden the Fed to raise rates. Stocks in the artificial-intelligence industry held steady, with Nvidia rising 0.8% and Advanced Micro Devices climbing 2.6%, but J.B. Hunt Transport Services dropped 10.5% after its CFO warned of higher costs and lower earnings.