Stocks rally broadly on Wall Street ahead of Fed statement
Stocks rose broadly on Wall Street on Wednesday ahead of an update from the Federal Reserve on how and when it might begin easing its extraordinary support measures for the economy.
The S&P 500 was up 1% as of 11:13 AM ET. The Dow Jones Industrial Average rose 394 points, or 1.2 percent, to 34,313 points, and the Nasdaq gained 0.8 percent.
Gains in the S&P 500 were broad and could break a four-day losing streak if they continue. More than 90% of the stocks in the index rose. Banks and technology companies led the gains. Telecom and utilities companies have lagged behind the market.
Smaller stocks fared slightly better than the broader market. The Russell 2000 index rose 1.4%.
The yield on the 10-year Treasury bond settled at 1.32%. Crude oil prices rose 1.4%.
Facebook shares fell 3.7 percent, paring gains in telecoms stocks. The social media company’s oversight board said it will review an internal system that exempts high-profile users from some or all of its rules.
FedEx fell 8.5% after it reported a sharp rise in costs even as shipping demand increased. A wide range of industrial and other businesses are dealing with higher costs due to a combination of business and supply chain problems.
The main focus for investors on Wednesday is the Federal Reserve’s statement on interest rate policy. The central bank has been buying bonds to keep interest rates low since the pandemic consumed the economy 18 months ago. It has indicated that it will eventually reduce these purchases, but the scope and timing remain unknown.
Wall Street is trying to gauge how the slowdown in the economic recovery will affect the Fed’s decision-making process. The broader market has been volatile as this question lingers amid rising COVID-19 cases due to the highly contagious delta variant.
Investors were also concerned about debt-laden Chinese property developers and the damage they could cause if they defaulted and send ripple effects across the markets. Evergrande, one of China’s largest private sector conglomerates, said it will make a payment due on Thursday, which could ease some of those concerns.
European markets were mostly up and Asian markets were mixed. Markets in South Korea and Hong Kong were closed for holidays.
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