Stocks Fall As Investors Await Fed Decision Powell Suggests

The U.S. central bank is widely expected to raise its key short-term interest rate by 0.75 percent for a fourth straight time after concluding its two-day meeting at 2 p.m. ET. The S&P 500 (^GSPC) was down 0.6% in midday trading, while the Dow Jones Industrial Average (^DJI) was down about 0.2%. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 1%. Bond yields rose along with stocks. The benchmark 10-year bond held above 4%, while interest-sensitive two-year yields hovered around 4.5%. On the economic data front, U.S. private payrolls unexpectedly rose in October, according to ADP’s national jobs report, which serves as an incomplete curtain call for the government’s monthly jobs report due on Friday. Data on Wednesday suggested the labor market remained tight despite the Fed’s efforts to curb growth in its fight against inflation, suggesting aggressive rate hikes may continue. Investors will tune in for Powell’s press conference at 2:30 p.m. ET in the wake of the rate decision, which will be accompanied by economic forecasts from policymakers and the latest dot chart showing each member’s forecast for the short-term U.S. interest rate. “The focus will be on what’s next, and we expect Chairman Powell to hint that the Federal Open Market Committee will likely slow the rate to 50 basis points in December,” Goldman Sachs economists led by Jan Hatzius said in a recent note. Any signal from the central bank about a possible easing of the pace of tightening will serve as a tailwind for the major indexes, which closed higher last month on expectations of a policy shift sparked by chatter from some officials suggesting a tapering of interest rates. interest rate hikes and global concerns that tightening could cause financial instability. However, some strategists have backed the notion that a change in Fed course is imminent, with inflation and wages still elevated. The story continues “So far, benchmarks on inflation and the labor market have not been met, so Mr. Powell cannot announce any intention to move to slower rate hikes without contradicting what he said just six weeks ago.” Pantheon Economics Chief Economist Ian. Shepherdson said in emailed comments. “Evidence of easing pressure in the pipeline is abundant, but it has not yet reached the numbers that the Fed chair has clearly said on many occasions matter most, namely the real data on core inflation.” WASHINGTON, DC – OCTOBER 03: Federal Reserve Board Chairman Jerome Powell listens during a meeting with the US Treasury on October 3, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images) On the business side, shares of Estée Lauder ( EL ) sank more than 7% after the company cut its full-year guidance. The cosmetics maker cited currency headwinds, a lockdown in China and some US retailers pulling its cosmetics and fragrances from their shelves amid concerns of slowing demand. Shares of Paramount ( PARA ) fell as much as 12% after the company reported a hit to earnings due to content investments and said weakness in advertising revenue also weighed on the quarter. Shares of Advanced Micro Devices (AMD) gained 3% after the chipmaker reported better-than-expected earnings results, even though fourth-quarter revenue guidance fell short of Wall Street estimates. The dating app Tinder is seen on a mobile phone in this picture taken on September 1, 2020. Picture taken on September 1, 2020. REUTERS/Akhtar Soomro/Illustration Shares of Tinder, Hinge and OkCupid Match Group (MTCH) rose 5% after financial data showed revenue that beat analysts’ estimates and the company promised to control costs to prepare for low financial expectations. Shares of Mondelez International ( MDLZ ) rose 2% after the Oreo maker raised its full-year outlook for sales and profit and said shoppers continued to indulge in snacks and drinks despite inflation. Meanwhile, shares of Airbnb ( ABNB ) fell nearly 10% after the company warned of a slowdown in growth in the fourth quarter as consumers push for higher rents and favor urban and cross-border destinations. — Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc Click here for the latest Yahoo Finance platform stock trends Click here for the latest stock market news and in-depth analysis, including the events that move stocks Read the latest financial and business news from Yahoo Finance Download the Yahoo Finance app for Apple or Android Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn and YouTube