Market sees 22% chance of 100 bps rate hike from Fed -CME Railroad stocks fall amid strike-avoidance talks Gainers: Dow 0.10%, S&P 0.34%, Nasdaq 0.74%
NEW YORK, Sept 14 (Reuters) – Wall Street ended a non-directional session higher on Wednesday as a report on target inflation largely stemmed the flow of Tuesday’s sell-off and investors hit the pause button. All three indices fluctuated during the day, but eventually ended up in positive territory. All failed to recover much of the ground lost in Tuesday’s carnage, which saw them fall the most in more than two years. “Today is a day where you don’t lick your wounds after taking a beating yesterday,” said Ryan Detrick, chief market strategist at the Carson Group in Omaha, Nebraska. “It’s a day of rest and that’s kind of a welcome sign.” Sign up now for FREE unlimited access to Reuters.comSign up The Labor Department’s producer price (PPI) data landed near consensus estimates and provided some relief in the wake of Tuesday’s market-hit CPI burst, which came in higher than expected. read more “The inflation debate continues, and yesterday was a stark reminder that this is an uphill battle and that the Fed must remain aggressive in putting a cap on the widespread inflation we’re seeing,” Detrick added. The PPI report offered reassurance that inflation is indeed on a slow, downward path. Inflation But it still has a long way to go to approach the Federal Reserve’s 2% average annual inflation target, and while financial markets have fully priced in a rate hike of at least 75 basis points at the end of the FOMC’s policy meeting next week, they see a 22% chance of an oversized 100 basis point hike, according to CME’s FedWatch tool. Two-year U.S. Treasury yields, which reflect interest rate expectations, extended Tuesday’s gains. The size and duration of further interest rate hikes ahead have many market watchers worried about the lingering effects of the Fed’s tightening phase, while some view recession as inevitable. A trader works at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., September 13, 2022. REUTERS/Andrew Kelly The transportation sector (.DJT), considered a barometer of economic health and providing a look at the supply side of the inflation picture, was weighed down by rail stocks ahead of a possible strike. “Does the White House really want the railroads to shut down and further disrupt supply chains, less than two months before the midterm elections?” Detrick asked. “We’re optimistic they can keep the rails open.” Railroad operators Union Pacific ( UNP.N ), Norfolk Southern ( NSC.N ) and CSX Corp ( CSX.O ) lost 3.7 percent, 2.2 percent and 1.0 percent, respectively, even as Labor Secretary Marty Walsh met with union representatives in Washington in talks aimed at averting a rail shutdown. read more The Dow Jones Industrial Average (.DJI) rose 30.12 points, or 0.1%, to 31,135.09, the S&P 500 (.SPX) gained 13.32 points, or 0.34%, to 3,946.01 and the Nasdaq Composite)1 added (8 points). 0.74%, to 11,719.68. Six of the 11 major S&P 500 sectors advanced, with energy shares (.SPNY) leading the gainers helped by a rise in crude prices on supply concerns. Shares of Starbucks Corp ( SBUX.O ) jumped 5.5 percent after the company raised its three-year earnings and sales outlook. read more Tesla Inc ( TSLA.O ) rebounded from Tuesday’s decline, rising 3.6 percent on the same day President Joe Biden announced $900 million in funding for electric vehicle charging stations. read more Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.05 to 1. On the Nasdaq, the ratio favored bears by 1.06 to 1. The S&P 500 hit 2 new 52-week highs and 30 new lows. the Nasdaq Composite recorded 26 new highs and 219 new lows. Volume on US exchanges was 10.90 billion shares, compared to an average of 10.33 billion over the past 20 trading days. Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Stephen Culp in New York Additional reporting by Ankika Biswas, Devik Jain and Sruthi Shankar in Bangalore Editing by Matthew Lewis Our Standards: The Thomson Reuters Trust Principles.
