4:05pm: US stocks spike before the close
After holding steady for most of the day, US stocks soared into the green on Wednesday afternoon after the Fed handed down an interest rate hike of a half-point in line with investors’ expectations.
At the close, the Dow had gained 932 points or 2.8% to finish the day at 34,061 points.
The S&P 500 was up 125 points or 3% to close at 4,300 points, with the Nasdaq gaining 401 points or 3.2% to close at 12,965 points.
2:15pm: US stocks steady following interest rate hike
US stocks have remained steady after the Fed revealed it would be increasing the interest rate by a half-point, the most significant increase since May 2000.
Shortly after the announcement, the Dow was trading up 72 points at 33,201 points and the S&P 500 was steady at 4,176 points.
The Nasdaq was still in the red but had improved slightly from earlier in the day, down 0.6%.
AvaTrade chief market analyst Naeem Aslam said the fact that the interest rate increase had been anticipated by the markets had calmed some nerves.
“The dollar index has lost steam on the back of the Fed’s decision and this has helped the gold price which has been oversold as some were thinking that the Fed may increase the interest rate by 75 basis points,” Aslam said.
“We also see a relief rally for the US equity markets while traders are still fully digesting the message from the Fed."
BRI Wealth Management CEO Dan Boardman-Weston said that this interest rate increase was one of many to be expected during 2022 as the current conflict in Ukraine and pandemic-induced lockdowns in China put upward pressure on the rate of inflation.
"Higher interest rates were expected by the market as inflation continues to hit multi-decade highs and the Fed feels it needs to act quickly before high inflation expectations become entrenched," Boardman-Weston said.
"The Fed is expected to frontload their interest rate increases and we’re likely to see them tighten quickly over the coming months to a rate that dampens economic activity."
12:05pm: US stocks mixed at noon
US stocks have remained relatively flat as investors await an expected interest rate hike following a meeting of the Fed this afternoon.
At noon, the Dow and S&P 500 were both steady at 33,147 points and 4,168 points respectively.
However, the tech-heavy Nasdaq had slid into the red, down about 1%.
IG chief market analyst Chris Beauchamp said it was not difficult to work out why stocks had edged down.
“The Fed’s rate hike move might be broadly priced in, but markets are clearly nervous that an even more hawkish FOMC might prompt a surge in volatility that could push indices back below last week’s lows,” Beauchamp said.
11.10am: Proactive North America headlines:
Sonoro Gold says it has filed an environmental impact statement for its Cerro Caliche gold project in Sonora, Mexico
Vuzix set to reveal its OEM design and manufacturing platform offering at SID Display Week 2022
Aftermath Silver (TSX-V:AAG) finds silver, copper, manganese intercepts in first assay results from Berenguela project in Peru
Mountain Boy Minerals continues data collection at Telegraph copper-gold property ahead of 2022 field season
Southern Silver Exploration extends silver-polymetallic mineralization at North Felsite and El Sol targets at CLM project, in Mexico
Bloom Health Partners invited to join BC MedTech trade mission to UK
African Gold Group announces plans for ASX dual listing as it tweaks its board
Naturally Splendid shows off Plantein plant-based meals on trade show circuit
Doubleview Gold puts logistical pieces in place ahead of a 2022 exploration program at its Hat property in British Columbia
Marble inks licensing agreement with thirdstream for its Connect API and Inverite Open Banking Software
Gratomic says trenching at Jacobina project in Brazil indicates highly prospective graphite resource
Pfizer accused of profiteering after reporting further leap in Covid vaccine sales
Camino Minerals executes agreement to commence 1,500 metres of core drilling at its Los Chapitos copper project in Peru
Casa Minerals gears up for 10,000-metre drill program at the formerly producing Congress gold property in Arizona
New Age Metals (TSX-V:NAM, OTCQB:NMTLF) updates on progress of its pre-feasibility study for the River Valley palladium project, Ontario
Playgon Games (TSX-V:DEAL, OTCQB:PLGNF) applies for Gaming Related Supplier license in Ontario
Cloud DX (TSX-V:CDX, OTCQB:CDXFF) signs third paramedical service provider with Peterborough County Paramedics
Marvel Discovery CEO sees rare earth potential at British Columbia project after neighboring deposit reports promising results
Unrivaled Brands (OTCQX:UNRV) outlines 100-day transformation plan to drive profitability
Adastra reports impressive 2021 revenue increase as company focuses on production rollout and market expansion
Fabled Copper reports on Davis Keays Eagle Vein area with six new parallel veins discovered and values as high as 6.73% copper
Copper Fox Metals gears up for proposed 2022 drill program at its Eaglehead project in British Columbia
Starton Therapeutics updates on phase 1 of STAR-LLD lenalidomide clinical program
QC Copper and Gold reveals encouraging new intersections from Opemiska, expanding size of starter pit
Aurion Resources (TSX-V:AU) advances Helmi discovery in Finland with Aurion-B2Gold joint venture winter drilling
Ultra Lithium says it has closed second tranche of private placement for gross proceeds of C$570,200
Guardforce AI (NASDAQ:GFAI) announces deployment of more than 4,800 robots in nine countries
Kodiak Copper confirms Dillard zone as "substantial" porphyry target with drilling at MPD project
Usha Resources announces the listing of its shares on the Frankfurt Stock Exchange
Ortho Regenerative Technologies (CSE:ORTH) secures US patent for its ORTHO-R soft tissue repair platform
Planet 13 announces expansion of STIIIZY partnership with new shop-in-shop at Las Vegas SuperStore
Looking Glass Labs announces roadmap for GenZeroes live-action NFT series
Sunrise Resources holds talks with potential partners during chairman's recent visit to US
Horizonte Minerals appoints ESG veteran Philipa Varris as head of sustainability
CULT Food Science says CELL AG portfolio company partners with CCRM to scale up cell-based fish manufacturing
Tocvan Ventures says will shortly close non-brokered private placement for gross proceeds of up to C$346,200
Power Nickel adds $833,568.7 to the capital of the company as a result of warrant exercises
DRDGOLD says cash and cash equivalents increased in quarter ended March 31, 2022
10am: US stocks start largely unchanged
US shares started mainly flat midweek as traders mull over jobs data and await an expected half-point rate hike by the Federal Reserve.
In early deals in New York, the Dow Jones Industrial Average gained around ten points to stand at 33,136. The S&P 500 added around two points to stand at 4,177.
The Nasdaq Composite Index shed nearly five points at 12,599.
It comes as processing firm ADP reported that private payrolls increased by just 247,000 for April this year. The figure is always closely watched as a pre-cursor to Friday's main event.
Estimates had been for a 390,000 gain so it was well short of expectations and also a significant decline from March this year, which saw an upwardly revised gain of 479,000.
It suggests that US companies are still struggling to find workers to fill open positions.
6.30am: Stocks treading water ahead of rate verdict
US stocks were expected to open flat to higher on Wednesday ahead of the Federal Open Market Committee’s rate decision later today, with markets pricing in a 50-basis point (bp) hike.
Investors will be watching for clues as to whether the Federal Reserve is planning many more rate increases amid the backdrop of commodity-driven price inflationary pressures and a tight labor market.
Futures for the Dow Jones Industrial Average rose 0.4% in pre-market trading, while those for the broader S&P 500 index gained 0.4%, and contracts for the Nasdaq-100 increased 0.3%.
“While the 50-basis point hike is fully priced in, there is a chance for the Fed to get more aggressive and hint at a 75bp hike in a future meeting, despite the economic indicators that start showing signs of slow down,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noting that a 50bp would be the first such increase in two decades.
To some extent, the main focus for the day will be on the Fed's press conference rather than the rate decision which is being viewed as a foregone conclusion. Comments from chairman Jerome Powell will be closely watched for signs of a further aggressive tightening of monetary policy.
The rate decision is scheduled for 2.00pm ET and the press conference for 2.30pm ET.
Among economic data out today, the latest ADP jobs figures will be key.
“The latest jobs data will throw light on what happened in the US jobs market in April. Due today, the ADP report is expected to print 395K new private job additions last month, and NFP data, due Friday, is also expected to add near 400K near nonfarm jobs,” noted Ozkardeskaya.
Continued strength in the US jobs market means that the weakness in the latest GDP data is unlikely to change the Fed’s tightening plans, she added: “Therefore, the US policymakers will remain focused on the inflation battle for the coming quarters, at the expense of growth.”
Benchmark crude oil prices were higher due to worries about supply as Russia's invasion of Ukraine continues in its third month with still no prospect of peace. Brent crude futures were up 3.4% at $108.50 a barrel while WTI futures rose 3.50% to $105.99 a barrel.
“We haven’t seen a significant fall below the $100pb in US crude, and the risks remain tilted to the upside as the European nations now consider walking away from the Russian energy, before Russia cuts its energy supply to them, after it turned off the tap for Poland and Bulgaria,” said Ozkardeskaya.
Contact the author at jon.hopkins@proactiveinvestors.com