Dow Stuck Above 52,100 as Fed Prepares to Raise Interest Rates

The Dow Jones Industrial Average has been stuck above 52,100 on Wednesday morning as investors await the Federal Reserve's decision to raise interest rates for the first time since 2023. The expected hike is worth nothing to the price, and the market hasn't priced in the accompanying forecasts that will be released alongside the decision.

At 18:00 GMT, the Fed is expected to increase its rate from 3.50-3.75% to 3.75-4.00%, with futures putting the odds at 100%. This means banks will pay more to borrow from each other overnight, and many other borrowing rates in the country will be affected.

Despite the expected hike, retail sales rose 1.2% in August against a 0.8% forecast, reversing July's 0.5% fall. The Dow owns the spending rather than the goods, with companies like Visa (V) and Walmart (WMT) benefiting from higher fuel bills.

The outcome nobody owns is a hold, but the market has priced in neither of the two possible paths: a rate hike to 4.5% or a slower walk down. The committee's forecasts will be closely watched, with futures predicting 4.15% by December and 4.52% by summer 2027.