Nasdaq remains at fresh 2023 highs as Dow wavers after cooler-than-expected wholesale inflation data ahead of Fed decision

U.S. stock indexes were mostly higher on Wednesday morning, after the November producer-price index showed wholesale inflation remained unchanged last month, while investors awaited the Federal Reserve’s policy decision, economic forecasts and commentary later in the session.

How are stock indexes trading

  • The S&P 500
    was adding 3 points, or 0.1%, to 4,646

  • The Dow Jones Industrial Average
    was off 6 points, leaving it nearly flat, at 36,569

  • The Nasdaq Composite
    was gaining 33 points, or 0.2%, to 14,566

On Tuesday, the Dow Jones Industrial Average rose 0.5%, to 36,578, the S&P 500 increased 0.5%, to 4,644, and the Nasdaq Composite gained 0.7%, to 14,533.

What’s driving markets

The S&P 500 and the Nasdaq Composite were sitting at their best levels since early 2022 on Wednesday morning, while the Dow industrials were struggling for a direction after cooling wholesale inflation boosted hopes the Federal Reserve is finished raising borrowing costs.

U.S. wholesale prices were unchanged in November in another sign of gradually easing inflation, the U.S. Bureau of Labor Statistics said. Economists polled by the Wall Street Journal had forecast a 0.1% increase in the producer-price index.

A separate measure of “core” wholesale prices that strips out volatile food, energy and trade margins edged up 0.1% last month, the government said.

Fed rate decision: Live coverage of FOMC meeting, dot plot and Powell press conference

The central bank concludes its two-day policy meeting on Wednesday, and investors were placing a 98.2% probability it will reveal at 2 p.m. Eastern that it is keeping interest rates unchanged at a range of 5.25% to 5.50%. It is also widely expected to stand pat at the next meeting in January, according to the CME FedWatch Tool.

The market is anticipating the next move by the Fed will be a cut in rates after its May meeting, and so traders will be keen to see whether the Fed’s forecasts and Chair Jerome Powell’s comments, starting at 2:30 p.m., match that narrative.

The Fed’s outlook will determine investor thinking in the shorter term, and will likely be market moving given the higher levels of optimism which have been building over the last couple of months, according to Richard Hunter, head of markets at Interactive Investor.

“[A]ny mention of potential rate cuts next year would be seized upon, especially since this is not something [to] which the Fed has yet alluded. It has instead maintained that, based on the information before it, the base case remains that rates will remain higher for longer until such as victory can be declared in the fight against inflation,” said Hunter.

Companies in focus

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