Stocks slip as Wall Street waits for Fed's latest rate hike

NEW YORK (AP) — Stocks are drifting lower on Wall Street Wednesday ahead of the Federal Reserve's latest decision on interest rates.

The S&P 500 was 0.3% lower in midday trading. The Dow Jones Industrial Average was down 244 points, or 0.7%, at 33,841, as of 11:30 a.m. Eastern time, while the Nasdaq composite was 0.2% lower.

The market is coming off a strong January, where stocks rose on hopes that cooling inflation could get the Federal Reserve to ease up on its barrage of hikes to interest rates that have rattled Wall Street.

Later Wednesday afternoon, the Fed is expected to announce its latest increase, one that would be the smallest since March at 0.25 percentage points. Perhaps more important than that will be what the Fed says about where rates are heading next.

Much of Wall Street is hoping the Fed may raise rates just one more time after Wednesday afternoon, before taking a pause and then possibly cutting rates toward the end of the year. Rate cuts can ease pressure on the economy and juice investment prices.

So far, though, the

Fed has been adamant that it plans no rate cuts until 2024 at the earliest and wants to hold rates higher for longer to ensure it doesn't allow inflation to fester and reignite.

Higher interest rates try to snuff out inflation by slowing the economy and dragging on prices for stocks and other investments. The

Fed has already pulled its key overnight rate to its highest level since 2007, at a range of 4.25% to 4.50%, up from virtually zero early last year.