NEW YORK — On Wednesday, U.S. stock markets are experiencing a gradual drift as investors anticipate news from the Federal Reserve, which could influence market trajectories moving into the new year.
The S&P 500 dipped by 0.1%, continuing to distance itself from its peak achieved earlier this month. The Dow Jones Industrial Average gained 79 points, or 0.2%, by 9:35 a.m. Eastern Time, while the Nasdaq composite saw a decrease of 0.2%.
Jabil, an electronics company, rose sharply by 9.6% after it reported quarterly profits and revenues that exceeded analysts’ expectations. Additionally, Jabil revised its revenue forecast upward for the entirety of its fiscal year, contributing to a positive tone in the market.
Nvidia, a key player that has contributed significantly to the recent market rallies, advanced by 2.8% following a period of lackluster performance. After experiencing a decline of over 12% from its peak last month and suffering losses in eight of the nine prior trading days, Nvidia’s resurgence is seen as a welcome sign for investors.
Conversely, General Mills saw a 3.7% decline in its stock despite reporting better-than-expected profits. The company, known for brands like Progresso soups and Cheerios, announced plans to boost investments in its products to stimulate growth, which led to a downward adjustment in its profit outlook for the current fiscal year.
Trading activity is anticipated to remain relatively subdued until later in the day when the Federal Reserve is expected to announce its third interest rate cut of the year. After successfully bringing inflation down from a peak of over 9% to nearly 2%, the Fed has been gradually lowering its main interest rate from a two-decade high, providing support to a tepid job market.
The key point of interest is how much further the Fed will reduce rates in 2025. Analysts are hopeful that Fed Chair Jerome Powell will provide intriguing insights during his press conference after the rate announcement. Officials from the Fed are also expected to share forecasts regarding the future trajectory of interest rates and the overall economy.
Anticipations regarding rate cuts for 2025 have been waning, in part due to a recent uptick in inflation rates. Concerns are also being raised over President-elect Donald Trump’s potential policies regarding tariffs, which could further accelerate inflation and foster economic growth.
Meanwhile, Treasury yields remained relatively stable as investors awaited further direction on interest rate trends. The yield on the 10-year Treasury fell slightly to 4.39% from 4.40% at the end of Tuesday’s trading session, and the two-year yield, which closely aligns with expectations of Fed actions, decreased to 4.21% from 4.25%.
International stock markets also displayed mixed results; London’s FTSE 100 saw a 0.1% increase following reports showing inflation surged to 2.6% in November, its highest point in eight months. The Bank of England is set to meet this week regarding interest rates and will announce its verdict on Thursday.
In Japan, the Nikkei 225 experienced a 0.7% decline, even amidst a notable 23.7% rise in Nissan Motor Corp. stocks. Nissan is reportedly in discussions for a closer collaboration with Honda Motor Co., although no formal decision regarding a merger has been reached yet. In contrast, Honda Motor’s shares fell by 3%.
Nissan, Honda, and Mitsubishi Motors, a member of the Nissan alliance, had agreed in August to share components for electric vehicles, including batteries, and collaborate on software for autonomous driving, seeking to navigate the rapidly evolving automotive industry more effectively.