US stocks were muted on Wednesday ahead of a key Federal Reserve meeting later in the day, with investors hoping for hints about the central bank’s thinking on rate hikes.
Wall Street’s benchmark S&P 500 fell 0.3%, while the tech-heavy Nasdaq Composite fell 0.2%. In Europe, the regional Stoxx Europe 600 lost 0.3%.
The moves come ahead of the US central bank’s Federal Open Market Committee meeting late Wednesday, with investors expecting interest rates to rise 0.75 percentage points for the fourth time in a row. Next, raise the federal funds rate to a new target range of 3.75 percent to 4 percent.
US stocks have rallied over the past two weeks on hopes that raised could slow borrowing costs at the December meeting.
The Fed’s mandate is to ensure stable prices, as well as maximize decent employment – a balancing act made more difficult by strong jobs data released on Tuesday showing the labor market US movements are still tight.
Employers added 437,000 job vacancies in September, bringing the total number of vacancies to 10.7 million at the end of the month, according to the labor department’s Employment and Labor Revenue Survey.
Aneta Markowska and Thomas Simons, economists at US bank Jefferies, said the latest jobs figures undermined hopes of the Fed’s dovish pivot.
“To slow growth, the Fed needs to make a convincing case that slowing labor demand will reduce pressure on labor costs, ultimately slowing inflation,” the pair said. “It is difficult to make that case after [Tuesday’s] report.”
US inflation meanwhile shows no signs of abating. The consumer price index, which measures core inflation, which excludes volatile food and energy costs, rose 6.6% year-on-year in September – the fastest pace in four decades.
In the government bond market, the 10-year US Treasury bond yield was stable at 4.04%. Equivalent UK government bond yields were also unchanged at 3.46%.
Chinese stocks rose on Wednesday, consolidating gains made in the previous session as unfounded rumors proving the country was looking to end its strict zero-Covid policy boosted investor sentiment. private.
Hong Kong’s Hang Seng Index rose 2.4%, while China’s CSI 300 gained 1.2%. The two indexes closed 5.2% and 3.6% higher, respectively, on Tuesday. Elsewhere in Asia, Japan’s Topix was up 0.1%.
