Wall Street Week Ahead: Markets brace for Federal Reserve rate decision

The US Federal Reserve will be the centre of attention in the week ahead as investors prepare for its upcoming monetary policy decision, with a potential interest-rate increase gaining traction following stronger employment data and firm inflation readings.

The US central bank is scheduled to announce its decision at 2 pm ET on Wednesday.

With much of the expected move already reflected in market pricing, investors are likely to focus more closely on the accompanying policy statement and Fed Chair Kevin Warsh’s press conference at 2:30 pm ET.

Markets will look for clues about whether the central bank intends to continue tightening monetary policy or adopt a more cautious approach in subsequent meetings.

Fed officials will also release updated projections covering US economic growth, inflation and the expected path of interest rates.

Beyond the Fed decision, investors will receive several important economic indicators during the week.

Fresh data on retail sales, housing starts and industrial production will offer additional insight into the strength of the US economy.

Energy markets will also remain firmly on investors’ radar after crude oil prices surged decisively above $100 a barrel again amid escalating tensions in the Middle East.

A sustained rise in oil prices could add fresh pressure on inflation by increasing energy and transportation costs and potentially feeding into broader consumer price increases.

US Economic Calendar

14 September (Monday): No events scheduled

15 September (Tuesday): Data on the Empire State Manufacturing Survey will be released.

16 September (Wednesday): Reports on retail Sales for August, NAHB Housing Market Index for September and Federal Reserve economic projection, and interest rate decision will be released.

17 September (Thursday): Reports on Housing Starts for August, Weekly Jobless Claims for September, and Pending Home Sales Index for August will be released.

18 September (Friday): Reports on Industrial Production for August and leading economic Indicators for August will be released.

Earnings

The following companies are scheduled to report their quarterly results in the coming week: Dave & Buster's, Lennar, Carnival and VinFast.

US Stock Market Last Week

US stocks rebounded and clawed back much of their losses for the week on Friday after oil prices eased off their recent spurt.

An update on inflation that came in line with economists’ expectations also helped calm the market.

On Friday, the S&P 500 rose 65.28 points or 0.9%, to 7,656.98. The Dow Jones Industrial Average rose 509.19 points or 1%, to 52,573.29. The Nasdaq composite rose 251.31 points or 1%, to 26,333.04.

The Russell 2000 index of smaller companies rose 13 points or 0.4% to 2,903.94.

For the week, the S&P 500 is down 61.62 points or 0.8%. The Dow is down 840.96 points or 1.6%. The Nasdaq is down 173.95 points or 0.7%.