US stocks rise after rate hikes

NEW YORK, Nov 2, (AP): US stocks bounced higher and Treasury yields fell sharply after the Federal Reserve indicated it might slow down the pace of its interest rate increases. The Fed also announced its fourth straight extra-large rate increase of three-quarters of a percentage point as it fights the worst inflation in decades. The Fed’s hint Wednesday that it could ease back on the rateincrease program was welcome news for markets, which have been worried the Fed could slow the economy so much that it goes into a recession. The yield on the twoyear Treasury fell sharply and the S&P 500 erased a loss and rose 0.6%.

Stocks fell in afternoon trading on Wall Street Wednesday, ahead of what traders expect will be another big interest rate increase from the Federal Reserve.

Markets will be watching closely to see what Fed Chair Jerome Powell says about the central bank’s outlook for how long rates will need to stay high to fight inflation.

The S&P 500 fell 0.6% as of 1:37 p.m. Eastern. The Dow Jones Industrial Average fell 46 points, or 0.1%, to 32,606 and the Nasdaq fell 1.1%. Small company stocks lost more ground than the broader market. The Russell 2000 fell 1.5%.

Technology stocks and retailers were among the biggest weights on the broader market. Apple fell 0.9% and Amazon shed 2.4%.

The Fed is due to wrap up a two-day policy meeting later Wednesday that’s expected to produce the sixth interest rate increase of the year. The widespread expectation is for the Fed to push through another increase that’s triple the usual size, or three-quarters of a percentage point.

Investors will be listening closely to Powell’s comments as they try to determine what the central bank’s next move will be at its final meeting of the year in December. Opinions are currently split among investors as to whether the Fed will make another three-quarters point move or dial back to a half-point increase.

The path ahead for the Fed is closely tied to whether inflation cools from its hottest levels in four decades. Wall Street is concerned about inflation squeezing consumers and businesses while worries grow that the Fed could bring on a recession by slowing the economy too much.

“At the end of the day, the markets like certainty and they don’t have certainty from the Fed,” said Ryan Grabinski, managing director of investment strategy at Strategas, a Baird company.

Powell has warned that the central bank’s fight against inflation would likely come with “some pain.”

Europe

In Europe at midday, France’s CAC 40 lost 0.2%, Britain’s FTSE lost 0.3% and Germany’s DAX was essentially flat.

Asia

Chinese shares extended gains, driven by speculation Beijing might be preparing to gradually relax stringent COVID-19 restrictions. Since that was not followed by any official confirmation, the enthusiasm could quickly fade.

Hong Kong’s Hang Seng jumped 2.4% to 15,827.17, while the Shanghai Composite index added 1.2% to 3,003.37.

Japan’s benchmark Nikkei 225 was little changed, declining less than 0.1% to finish at 27,663.39. Australia’s S&P/ASX 200 added 0.1% to 6,986.70. South Korea’s Kospi added nearly 0.1% to 2,336.87.

South Korea’s export growth fell in October as demand from China fell. Consumer price inflation rose 5.7% on year in October, in line with the market consensus.

“Sentiments in the Asia session could largely hold on to some wait-and-see as well, but eyes will remain on Chinese equities after their stellar performance yesterday,” Yeap Jun Rong, market strategist at IG in Singapore, said in a report.

Oil

In energy trading, benchmark U.S. crude added 18 cents to $88.55 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international