Stocks rise as investors await rate clarity from Fed

Date:

US stocks rose on Wednesday after a volatile start to the session, as investors awaited clarity from Federal Reserve policymakers about their monetary tightening plans amid gloomy economic data.

The S&P 500 gained 0.6% after the benchmark index fell for three consecutive sessions. The Dow Jones Industrial Average rose 175 points and the Nasdaq Composite rose nearly 1%.

Peloton (PTON) shares rose 20% after the company said it struck a deal to sell its fitness equipment and apparel on Amazon in an effort to turn its business around and regain investor confidence.

Investors are tense over the central bank’s annual symposium in Jackson Hole, Wyoming later this week, where officials are likely to curb the Fed’s commitment to fight inflation and curb hopes of rate cuts next year.

Despite reports from Federal Reserve speakers in recent weeks confirming that rate hikes will continue through the end of the year, the market is still pricing a lenient pivot, Baird Investment Strategy Analyst Ross Mayfield told Yahoo Finance Live.

“I really think all their jaws and hawkishness from the past few weeks is starting to show up,” Mayfield added. “But you still have a market that I’m not sure they will hold on to when the economy slows down next year.”

As the Fed meeting in Wyoming closes, traders will listen to comments from Chairman Jerome Powell for clues as to whether the next policy announcement on September 21 will result in another 75 basis point rate hike or an easing 0.50% hike.

US Fed Chair Jerome Powell and Bank of England Governor Mark Carney talk during the three-day “Challenges for Monetary Policy” conference in Jackson Hole, Wyoming, US, Aug. 23, 2019. REUTERS/Jonathan Crosby TPX IMAGES OF THE DAY

Meanwhile, shares of Nordstrom (JWN) plunged nearly 15% after the department store giant lowered its full-year sales outlook to a 5% to 7% range on Tuesday afternoon amid slower demand and stock gains. The move comes just three months after the company raised its outlook.

“Lower-income customer segments saw significantly more declines than higher-income segments,” CEO Erik Nordstrom said during Tuesday’s earnings call, pointing to a specific slowdown in the store’s discount-rack business.

Earnings season has come to an end, but there is more earnings for traders, with reports from Nvidia (NVDA) and salesforce.com (CRM) coming out on Wednesday.

In commodities markets, crude oil futures continued to rise after Saudi Arabia suggested Tuesday that the OPEC+ alliance may be experiencing production cuts. WTI crude oil futures rose about 1.2% to remain above $94 a barrel, while Brent crude oil futures rose by the same margin to $101 a barrel.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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