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Stocks Drift Higher as Investors Await Fed Decision on Interest Rates
The stock market has edged up in morning trade ahead of the Federal Reserve’s decision on interest rates, with investors seeking clarity on the direction of monetary policy amidst uncertainty over global economic growth. The S&P 500 rose 39 points, or 0.7%, to 5,653, while the Dow Jones Industrial Average and Nasdaq Composite increased by 0.5% and 1%, respectively.
Ahead of the Fed’s announcement at 2 p.m. EST, market participants are widely expecting the central bank to leave its benchmark interest rate unchanged, as Federal Reserve Chair Jerome Powell has repeatedly hinted at a wait-and-see approach. This decision is crucial in providing a measure of certainty on the direction of monetary policy amid growing concerns over the global economy.
Experts warn that the brewing trade war between the United States and key trading partners could drive up inflation and slam economic growth, creating a toxic mixture known as “stagflation.” Despite signs that the economy may be weakening, most Wall Street economists do not anticipate a recession in the near future. However, some forecasters are predicting volatile market movements due to ongoing tariff threats.
Analysts at UBS Global Wealth Management have cautioned investors to consider purchasing quality AI stocks and utilizing structured strategies to manage downside risks in their equity exposure. Oxford Economics’ lead analyst, John Canavan, has also stated that markets may have recently become overly pessimistic.
Source: https://www.cbsnews.com/news/stock-market-the-federal-reserve-interest-rates/
