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Stock market today: S&P, Dow mostly flat as world awaits Fed decision
Stocks treaded water during afternoon trading Tuesday, as investors expressed uncertainty over the size of the Federal Reserve’s expected rate cut, which is scheduled to be announced Wednesday at the conclusion of the major policy meeting.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) moved just above the flatline, losing momentum from earlier in the day. The Nasdaq Composite (^IXIC), meanwhile, gained about 0.2%.
Stocks are mostly flat as Wall Street keeps guessing at the odds of a 0.5% Fed rate cut, with just one day to go before officials reveal their monetary policy decision. The central bank’s two-day meeting, which begins Tuesday, is prevailingly expected to bring the first easing in rates since early 2020. Even as the size of the rate cut remains to be seen, investors and market observers are also torn on how the first rate cut will be perceived by the market.
Read more: Fed predictions for 2024: What experts say about the possibility of a rate cut
Investors were weighing data that showed retail sales surpassed Wall Street’s estimates in August, with a focus on signs of a slowdown in consumer spending. The reading is the last piece of data that could factor into the Fed’s thinking on whether to opt for a substantial rate cut rather than a quarter-point move.
Right now, the rate-path debate is focused on the possibility that the bigger cut could prompt panic in markets. At the same time, some on Wall Street suggested the smaller move could also disappoint and spark concern.
As of Tuesday, traders see odds of 63% on a 50 basis point reduction in rates, compared with 62% a day ago. The chances of a 25 basis point cut stand at 37%, per the CME FedWatch tool.
Meanwhile, Intel stock (INTC) popped after its foundry secured Amazon (AMZN) as a multibillion-dollar customer for AI chips. Also helping revive faith in battered tech stocks was Microsoft’s (MSFT) new plan to buy back up to $60 billion in shares and a 10% boost to its dividend.
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