Wall street opens on a muted note ahead of Fed policy meet

2 min read 19 Sep 2023, 07:22 PM IST Join us

Edited By Sharmila Bhadoria

US stocks drift ahead of Fed meeting; Instacart makes market debut; Stitch Fix shares tumble; Asian markets mixed; European markets steady.

Traders work on the floor at the New York Stock Exchange June 21, 2013 in New York. Worries over China's economic slowdown and the possible end to the US Federal Reserve's stimulus sent global markets into a tailspin Thursday. From Tokyo to Turkey and Paris to Wall Street, stocks racked up steep losses across the board, gold and oil prices sank, and the dollar jumped higher against most other currencies. AFP PHOTO / TIMOTHY CLARY

Ahead of the US Fed policy meeting, stocks are drifting again in the US stock market. The S&P 500 was off 0.2% early Tuesday. The Dow slipped 37 points and the Nasdaq composite was down 0.4%.

Futures for the Dow Jones Industrial Average and the S&P 500 were essentially flat, up less than 0.1% before the bell.

Also Read: Gold hits 2-week high ahead of US Fed meeting. Should you buy in this rally?

The day marks the beginning of a two-day meeting of the US Fed that will set the mood of the market for the next month. The meeting will conclude with the US Fed's decision on where interest rates are going.

There are expectations that the US central bank will hold benchmark interest rate at the current 5.25%-5.50% range on Wednesday, reported Reuters.

Also Read: Valuations have moved up; markets may be volatile in the near term, says Shibani Sircar Kurian of Kotak Mahindra AMC

The recent economic data has signalled the lowering gap between the core inflation and Fed's 2% target. However, there are still concerns about rising crude oil prices.

There are strong indications by the economic data of resilient performance of the US economy. These indications have further strengthened the optimism around soft landing and concerns of possible recession.

Also Read: Global markets update: US stocks end flat ahead of Fed meet

Traders have fully priced in a pause by the Fed on Wednesday, while chances of interest rates remaining unchanged in November stood at 74%, according to CME's FedWatch tool, reported Reuters. Other than US Fed, Japan's central bank will meet on Thursday and Friday.

Also Read: Can a gloomy Chinese market outlook spur foreign investor interest in India? Experts weigh in

Instacart's Nasdaq debut

Another key highlight of the US market was the debut of Instacart in the stock market. The IPO raised $660 million in its initial public offering of 22 million shares at $30 apiece. Its shares are set to begin trading on the Nasdaq stock exchange under the stock symbol “CART."

The pricing of the IPO gave Instacart a market value of around $10 billion, significantly lower than the $39 billion value placed on it in 2021.

Shares in Stitch Fix tumbled nearly 7% in premarket after the personalized online fashion retailer reported losing nearly 500,000 active users in the past year and forecast first-quarter revenue well below Wall Street estimates.

Elsewhere, in Asian trading, Japan’s Nikkei 225 dropped 0.9% to finish at 33,242.59. Australia’s S&P/ASX 200 lost 0.5% to 7,196.60. South Korea’s Kospi edged down 0.6% to 2,559.21. Hong Kong’s Hang Seng rose nearly 0.4% to 17,997.17, while the Shanghai Composite inched down less than 0.1% to 3,124.96.

In Europe at midday, France’s CAC 40 added 0.2%, Germany’s DAX fell 0.2% and Britain’s FTSE 100 was little changed, rising less than 0.1%.

In currency trading, the U.S. dollar rose to 147.69 Japanese yen from 147.58 yen. The euro cost $1.0708, up from $1.0691.

(With inputs from agencies)

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