Wall St teeters toward higher close on Fed interest rate hike

NEW YORK, Sept 14 (Reuters) – Wall Street ended a non-directional session higher on Wednesday as a target inflation report largely halted the flow of selling on Tuesday and investors hit the “pause” button.

All three indexes fluctuated throughout the day, but ultimately ended on positive territory. All of them failed to meaningfully recover the ground lost in Tuesday’s carnage, resulting in their biggest percentage drop in more than two years.

“Today is a lick-your-wounds day after yesterday’s body beating,” said Ryan Dedrick, chief market strategist at the Carson Group in Omaha, Nebraska. “It’s a rest day and that’s a welcome sign.”

The Labor Department’s producer prices (PPI) data came in near consensus estimates and Tuesday’s market-higher CPI print came in hotter than expected. read more

“The inflation debate continues and yesterday was a stark reminder that it’s an uphill battle and that the Fed needs to be aggressive to keep a lid on the widespread inflation we’re seeing,” Detrick added.

Indeed, the PPI report confirmed that inflation is on a slow, downward path.

But the Federal Reserve still has a long way to go to approach its average annual inflation target of 2%, and financial markets have fully priced in at least a 75 basis point interest rate hike at the end of the FOMC’s policy meeting next week. , they see a 22% chance of a super-sized, 100-basis-point increase, according to CME’s FedWatch tool.

Two-year U.S. Treasury yields extended gains on Tuesday, reflecting interest rate expectations.

And the size and timing of interest rate hikes has many market watchers worried about the lingering effects of the central bank’s tightening phase, with some seeing a recession as inevitable.

Department of Transport (.DJT)Seen as a barometer of economic health, it provides a glimpse into the supply side of the inflation picture.

“With two months to go before the midterm elections, does the White House want to shut down the rails and further disrupt supply chains?” Tedric asked. “We’re confident they can keep the rails open.”

Railway Operators Union Pacific (UNP.N)Norfolk South (NSC.N) and CSX Corp (CSX.O) They lost 3.7%, 2.2% and 1.0%, respectively, even as Union Secretary Marty Walsh met with union representatives in Washington to negotiate an end to the strike. read more

Dow Jones Industrial Average (.DJI) The S&P 500 rose 30.12 points, or 0.1%, to 31,135.09. (.SPX) The Nasdaq Composite rose 13.32 points, or 0.34%, to 3,946.01. (.IXIC) It added 86.10 points or 0.74% to 11,719.68.

Six of the S&P 500’s 11 major sectors advanced, including energy stocks (.SPNY) Supply concerns lead to gains from rising crude prices.

Starbucks Corp (SBUX.O) Shares rose 5.5% after the company raised its three-year profit and sales outlook. read more

Tesla Inc (TSLA.O) Recovering from Tuesday’s decline, it advanced 3.6% on the same day President Joe Biden announced $900 million in funding for electric vehicle charging stations. read more

Advancing issues outnumber declining issues on the NYSE by a 1.05-to-1 ratio; On the Nasdaq, a 1.06-to-1 ratio favored decliners.

The S&P 500 posted 2 new 52-week highs and 30 new lows; The Nasdaq Composite posted 26 new highs and 219 new lows.

There were 10.90 billion shares on US exchanges, compared to the 10.33 billion average over the past 20 trading days.

Reporting by Stephen Culp in New York Reporting by Angika Biswas, Devi Jain and Shruti Shankar Editing by Matthew Lewis in Bengaluru

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