US stocks traded mixed on Wednesday as investors awaited the Federal Reserve's interest-rate decision, with easing oil prices offering some relief after a two-day decline. The S&P 500 and Nasdaq moved higher, while the Dow slipped, as investors weighed inflation, elevated Treasury yields and the impact of the Middle East conflict on the outlook for interest rates, Reuters reported.
At 9:38 a.m. ET, the Dow Jones Industrial Average fell 99.26 points, or 0.19%, to 51,993.85. The S&P 500 gained 13.50 points, or 0.19%, to 7,599.84, while the Nasdaq Composite rose 111.71 points, or 0.43%, to 26,093.28.
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Fed decision takes centre stage
The Fed is scheduled to announce its rate decision at 2 p.m. ET, making it the main focus for markets. Investors are also watching Chair Kevin Warsh's comments for clues about the inflation outlook and the path of interest rates. Traders see a nearly 93% chance of a rate increase, according to the CME FedWatch tool, although uncertainty remains.
The policy decision comes as elevated Treasury yields and persistent inflation keep pressure on equities. Warsh has maintained his focus on controlling price pressures, while expectations around the decision remain closely tied to the Fed's policy credibility. Reuters reported that some analysts questioned whether markets were too confident about a hike.
“We think market pricing for a rate hike may be overly confident,” said Yung-Shin Kung, head and chief investment officer at Mast Investments. He added that a rate increase could be a weak tool to address the primary factors driving inflation, such as tariffs and the AI infrastructure buildout.
Oil retreat offers some relief
Lower oil prices provided some support to the broader market as concerns over the scale of Middle East supply disruptions eased. Reports that Saudi Arabia was offering additional crude cargoes through Oman helped reduce some supply fears.
Brent crude futures fell 1.1% to $107.55 a barrel, while US West Texas Intermediate crude futures declined 1.9% to $103.82. The retreat, however, did little to remove the broader inflation concerns that kept markets focused on energy prices and monetary policy.
Energy stocks remained under pressure, with the S&P 500 energy index falling 2.1%. Devon Energy and ConocoPhillips each declined more than 3%. Rate-sensitive utilities and real estate stocks outperformed, rising 0.6% and 0.4%, respectively.
Technology stocks remained mixed, with Nvidia and Apple edging higher, Meta gaining 1.1% and Microsoft slipping marginally. Intel jumped 5.6% after a report said South Korea's SK Hynix was in talks with the company about memory chip manufacturing in the US.
“The market is incredibly resilient. It has every reason to fall in a meaningful way, and yet it isn't,” said Adam Sarhan, director at marketterminal.com.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
