4:10pm: Stocks reverse course after Fed decision
The S&P 500 and Dow turned positive after the Fed announced it was speeding the withdrawal of its crisis-era stimulus programs and ramped up the rate of tapering of its asset purchasing program to $30 billion per month.
The S&P 500 gained 1.63% or 76 points to finish at a healthy 4,710 points, while the Dow Jones grew 1.1% or 383 points to close at 35,927 points. The tech-laden Nasdaq, meanwhile, surged 2.2% to close at 15,566 points -- a 328 point increase.
Commenting on the Fed's decision, Naseem Aslam, chief market analyst at Avatrade, told investors: "Today we have seen the aggressive side of the Fed; they used all bullets and came with all guns blazing. Hence, we have seen the gold price falling off the cliff, and the dollar index gained more strength."
Aslam added: "Next year, three rate hikes means 75 basis points, which is much more than what market players expected. As for the equity markets, traders have been praying to see the aggressive side of the Fed, and they like the fact that the Fed is finally ready to tackle inflation which is getting out of control."
12:00pm: US equities lower midday as investors await the Fed
US stocks were lower midday as investors readied for Wednesday’s highly anticipated Federal Reserve decision.
The Fed, which is grappling with the highest inflation level in 39 years, will conclude its two-day policy meeting and the public will hear from central bank Chairman Jerome Powell at a 2:30 pm ET news conference.
As of noon, the Dow Jones Industrial Average was down 35 points, or 0.10%, to 35,507. The S&P 500 fell 17 points, or 0.35%, to 4,617.
And the tech-heavy Nasdaq dropped 146 points, or 0.96%, to 15,089.
Chris Beauchamp, chief market analyst at online trading group IG, said the Fed’s tone is crucial for equities and the US dollar.
“Apart from some gains in European markets, stocks remain on the back foot, as investors across the globe prepare for a busy 24 hours in the world of central banking,” he said, noting that “the Fed is expected to quicken the pace of tapering” heading into 2022.
The biggest gainer on the day so far is CMC Materials Inc, up 28% to $186.08 a share.
11.10am: Proactive North America headlines:
MegumaGold starts drilling at its Elmtree gold project in New Brunswick
Recruiter.com boosts software focus in MOU with Raise Recruiting
Trust Stamp (OTCQX:IDAI, EURONEXT:AIID) announces strategic growth plan in Africa
Dalrada partners with Lenovo and Iceotope to provide liquid-cooled rack-mounted servers with heat recovery
Globex Mining Enterprises options Magusi Mine project in Quebec to Electro Metals and Mining
Etruscus Resources (CSE:ETR, OTC:ETRUF) reveals positive results from its field exploration program at the Rock & Roll property in British Columbia's Golden Triangle
Loncor Gold says Adumbi preliminary assessment signals robust project over life of the mine
Boosh to launch direct home delivery on Booshfood.com in January for North American consumers
Cloud DX (TSX-V:CDX, OTCQB:CDXFF) says Hamilton Health Sciences adopting its remote patient monitoring platform
Naturally Splendid Enterprises says its NATERA plant-based foods now offered through DirectFood.store
Cabral Gold intersects high-grade gold at PDM target on its Cuiú Cuiú gold project
NEXE Innovations set to ramp up annual pod production after successful site acceptance test for proprietary equipment
Nextech AR launches Stripe Integration for its 3D mapping and event platform Map Dynamics
Royal Road receives environment and social management award from Colombian government
African Gold continues to expand resource potential at Kobada Est in Mali
FansUnite Entertainment's Askott Games division inks deal to launch casino games on Pariplay
Lumina Gold adds drill rigs to target mineral resource estimate conversion and expansion at its Cangrejos project in Ecuador
KetamineOne Capital appoints Joe Ramelli as its chief financial officer
CleanSpark reports strong strong fourth-quarter and full-year revenue growth as its hash rate surges
Tocvan Ventures starts drilling again at Pilar project in Mexico
XPhyto epilepsy clinical trial planned in 2022 with its proprietary fast-dissolving CBD oral strips
Valeo Pharma reveals a major milestone for its two innovative asthma therapies with reimbursements approved
Nomad Royalty (TSX:NSR) pays first US$13.3M under Greenstone gold deal and updates on asset portfolio
9.43am: US stocks start lower
US shares started lower and lackluster midweek as traders await the key Fed decision on speeding up the end of bond-buying, and as US retail sales last month increased less than had been expected.
In New York, the Dow Jones Industrial Average shed around one point at 35,543. The S&P 500 was near flat at 4,643.
The technology-laden Nasdaq lost around 37 points at 15,200.
Official figures released showed retail sales increased 0.3% in November this year. Economists had predicted a 0.8% rise.
That said, the data for October was revised higher to show retail sales rising 1.8% instead of 1.7% previously reported. Sales in the US have now risen for four months in a row.
The US Federal Reserve's two day policy meeting ends today and the result is eagerly awaited.
"The FOMC simply cannot justify not tapering QE with consumer inflation at its highest since the early 80s, producer prices racing to an all-time high, GDP already above pre-pandemic levels and the labour market being tight," said Fawad Razaqzada, analyst at ThinkMarkets.
"Expect to see lots of fireworks. This will be the start of major central bank meetings bonanza, ahead of the likes BoE, ECB and CBRT on Thursday," he added.
"So, there is a very good chance we might see a final spike in volatility in the next few days, before things potentially calm down as we approach Christmas holidays
6.30am: US stocks seen opening mixed
US stocks are expected to open mixed as investors await direction from the US Federal Reserve’s last policy-setting meeting of the year following higher than expected producer inflation numbers on Tuesday.
Futures for the Dow Jones Industrial Average rose 0.03% in Wednesday pre-market trading, while the broader S&P 500 index eased back 0.1% and those for the tech-heavy Nasdaq 100 shed 0.34%.
Fed chair Jerome Powell is expected to announce a faster winding down of the US central bank’s program of quantitative easing when the Federal Open Market Committee (FOMC) wraps up its two-day meeting. The producer price index showed a 9.6% year-over-year increase for November, the fastest pace on record and above the 9.2% expected by economists.
Stocks finished Tuesday’s trading session lower following the release of the inflation data, with the Dow losing 0.3% to 35,544, while the S&P 500 fell 0.75% to 4,634 and the Nasdaq Composite declined 1.14% to 15,238.
"The (Fed's) hawkish pivot has already been done in a series of public statements, so there ought not to be too many surprises," commented Neil Wilson, chief market analyst at Markets.com.
"We are expecting the FOMC to announce a swifter pace of taper – up to $30 billion monthly to get it out of the way in 1Q and provide the optionality to get on with hikes. There is likely going to be coalescence around at least 2 hikes in 2022 – remember the September dot plot showed policymakers evenly split between the first hike in 2022 or 2022.
"I’d expect much more consensus around 2022 for lift-off and for there to be a majority favouring a minimum of two hikes next year – bringing it into line with the broad market consensus," Wilson added.