U.S. Market Averages Turned Down Ahead of Fed's Rate Decision and Economic Forecast

Barry Adams
19 Sep, 2023
New York City

Market indexes on Wall Street struggled to get traction as investors remained focused on Fed's rate decision and economic forecast. 

The S&P 500 index and the Nasdaq Composite index dropped as investors awaited the outcome of two-day policy meeting held by the Federal Reserve. 

Investors widely believe that policy committee will hold rates for the second time and leave its target rate range between 5.25% and 5.5%. 

Investors are also looking ahead to the release of economic forecast, and will be looking for Fed's forecast on economic growth, jobless rate and inflation rate. 

The Fed's ten successive rate hikes between March 2022 and May 2023, inflation has slowed down from peak of over 8% to near 4%, but still higher than the 2% target. 

Moreover, inflation has declined because of base effect and the rate hikes have not been restrictive enough to slowdown economic activities. 

Despite multiple rate hikes, interest rates have lagged inflation rate and failed to slowdown consumer spending and business borrowing. 

 

U.S. Indexes & Yields 

The S&P 500 index inched down 0.4% to 4,432.96 and the Nasdaq Composite decreased 0.6% to 13,626.27. 

The yield on 2-year Treasury notes hovered near 5.07%, 10-year Treasury notes inched slightly higher to 4.33% and 30-year Treasury bonds edged up to 4.41%. 

Crude oil increased $1.22 to $92.72 a barrel and natural gas prices increased 10 cents to $2.83 a thermal unit. 

The dollar index edged slightly lower to 105.04, the level last seen in March but higher than the low of 99.85 on July 13. 

 

U.S. Stock Movers 

Rocket Lab USA Inc dropped 18% to $4.12 after the company's uncrewed launched failed in the early hours of Tuesday morning. 

The company confirmed that its 41st Electron rocket launch off the coast of New Zealand failed after two minutes and 30 seconds in flight carrying the Acadia 2 satellite for Capella Space based in San Francisco. 

The company also said it plans to postpone its next space launch and will revise lower its third quarter revenue outlook. 

Rocket Launch had 19 successful launches in a row since May 2021 and is now the second most active rocket launch company in the U.S., trailing only to Space X owned by Elon Musk. 

Maplebear Inc, parent of Instacart delivery service provider, priced its initial public offering at $30 a share, at the upper end of its price range, and raise about $600 million.

The offering valued the company at $9.9 billion and and just days before PepsiCo agreed to invest $175 million in the company.   

Walt Disney Co decreased 3.2% to $82.23 after the company said in a SEC filing that it plans to double its investment in theme parks and cruise business to $60 billion over the next decade.