Investing.com – Stocks on Wall Street moved around both sides of the flat line on Wednesday as investors focused ahead of a historic decision by the Federal Reserve that is likely to lead to its first interest rate cut since March 2020.
By 09:53 ET (13:53 GMT), the benchmark index was mostly unchanged, with technology stocks gaining 26 points, or 0.2%, and the 30-cap stocks falling 93 points, or 0.3%.
Markets see greater chance of 50bp rate cut
The Federal Reserve is widely expected to cut borrowing costs from a more than two-decade high of 5.25% to 5.5% after its latest two-day meeting.
The CME Group’s closely watched FedWatch tool showed that traders are pricing in a 61% chance of a 50 basis point rate cut, and a 39% chance of a 25 basis point rate cut.
But analysts at ING said a decision was still “unlikely.” In the last data point before the announcement, U.S. retail sales unexpectedly rose in August, pointing to consumer resilience and the strength of the broader economy.
The breadth of Wednesday’s decline is likely to set expectations for how the Federal Reserve plans to implement a potential easing cycle over the coming months.
In addition to the expected cut, the Fed announcement will also include an updated look at policymakers’ expectations for interest rates, a possible “fix” to the Fed’s official statement, and a press conference with Fed Chairman Jerome Powell.
Traders will likely be looking for any insights into how the Fed plans to handle a potential easing cycle, with markets currently expecting at least 100 basis points of cuts by the end of 2024.
U.S. Steel shares rise after report of Nippon Steel deal extension
Among the biggest movers, shares of United States Steel (NYSE:) rose after Bloomberg News reported that Nippon Steel won an extension in its $14.1 billion approach review for the U.S. steelmaker. A decision is now likely only after the 2024 election in November.
Elsewhere, all seven independent directors of 23andMe Holding Co (NASDAQ:) resigned on Tuesday. The directors said they had not received a satisfactory takeover offer from Chief Executive Anne Wojcicki. The company’s shares are trading slightly higher after falling in premarket trading.
(Ambar Warrick contributed to this report.)