U.S. markets hold steady ahead of Fed rate decision

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U.S. markets steady before Fed

Highlights

The Nasdaq Composite rises 0.43% while the Dow and S&P 500 stay flat as markets await the Federal Open Market Committee rate decision.
U.S. retail sales jump 1.2% versus the 0.8% forecast, boosting consumer spending signals even as WTI crude drops 1.7% to the low-$104 range and 10-year Treasury yield falls to 4.97%.
J.B. Hunt plunges over 10% after forecasting a 5-10% Q3 profit decline due to rising fuel prices and bond yields; SK Hynix and Intel gain 3%+ on U.S. memory chip production talks.

Trading signals before the policy announcement

As reported by Cboe Global Markets, market activity is subdued before the Federal Open Market Committee releases its rate decision and Chair comments at a press conference later in the afternoon.

The Dow Jones Industrial Average and the S&P 500 Index are hovering near flat in early trading, while the Nasdaq Composite is modestly higher, up 0.43%. Investors are also watching the CME FedWatch tool, which shows a 92.7% probability, although the FOMC retains the final say on policy.

Fresh economic data is adding to the backdrop. U.S. retail sales rise 1.2%, above the 0.8% expectation, suggesting consumers continue to spend despite higher fuel prices and broader cost pressures. Meanwhile, WTI crude falls 1.7% into the low-$104-a-barrel range, and the 10-year Treasury yield slips to 4.97% from an intraday high of 5.04% on Tuesday.

Company moves and sector implications

Outside the broader index action, J.B. Hunt shares drop more than 10% after the trucking company warns that higher costs are pressuring earnings and says third-quarter profit is expected to decline by 5% to 10%. Rising gasoline and diesel prices, alongside higher bond yields, are weighing on profitability.

Technology stocks are also in focus. SK Hynix and Intel both rise more than 3% after Reuters reports the companies are in talks to produce SK Hynix memory chips in the U.S. for the first time using Intel manufacturing capacity, although SK Hynix says it is exploring several options.

In digital assets, cryptocurrency-linked stocks are mostly higher after the Senate narrowly rejects the Digital Asset Market Clarity Act on Tuesday. Shares of MicroStrategy, Coinbase and Robinhood are flat to modestly higher, while Circle falls 1%. Investors are also looking ahead to Lennar results after the bell, with management commentary on housing and the economy likely to draw attention as any rate increase could feed through to mortgage costs and the broader housing market.

Our earlier article on rising Treasury yields and their impact on homebuilders focused on how higher mortgage rates were weighing on housing demand and putting fresh pressure on D.R. Horton. We outlined a bearish technical setup as the 10-year yield pushed above 5%, alongside softer fundamentals and a guidance cut that made builder incentives more costly.

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