US stocks edge higher ahead of expected interest rate hike: Report
On Wednesday, the central bank will announce its latest decision on rates and is expected to raise its benchmark rate, which influences interest rates throughout the economy, another three-quarters of a percentage point.
Stocks edged higher in morning trading on Wall Street Monday as investors brace for another big interest rate increase this week from the Federal Reserve.
The S&P 500 rose 0.2% as of 10:18 a.m. Eastern. The Dow Jones Industrial Average rose 72 points, or 0.2%, to 30,896 and the Nasdaq rose 0.2%.
Wall Street remains focused on inflation and the Federal Reserve's attempt to lower prices by aggressively raising interest rates. On Wednesday, the central bank will announce its latest decision on rates and is expected to raise its benchmark rate, which influences interest rates throughout the economy, another three-quarters of a percentage point.
Retailers and banks made solid gains. Home Depot rose 1.5% and Bank of America rose 2%. Health care stocks slipped and tempered gains elsewhere in the market. Pfizer fell 1.6%.
The yield on the 2-year Treasury, which tends to follow expectations for Fed action, rose to 3.93% from 3.87% late Friday. The 10-year yield, which influences mortgage rates, rose to 3.47% from 3.45%.
The broader market is coming off of its worst week in three months following a surprisingly hot report on inflation and big companies, including FedEx, warning about worsening trends in the economy.
Wall Street has been worried that the Fed's plan to cool the hottest inflation in four decades could be too aggressive and throw the economy into a recession by pumping the brakes on growth too hard. The higher rates also tend to weigh on stocks, especially the pricier technology sector.
Investors will get another update on the housing sector on Wednesday when the National Association of Realtors releases August figures for sales of previously occupied homes.
Average long-term U.S. mortgage rates climbed above 6% last week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for American homebuyers.
Britain was observing a day of mourning for Queen Elizabeth II. Germany's DAX rose 0.8% while the CAC 40 in Paris rose 0.1%. Hong Kong’s Hang Seng lost 1% while the Shanghai Composite index shed 0.3%. Japan’s markets were closed for a holiday.
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