Stock Market Today: Stocks nudge higher with Fed rate decision on deck

U.S. stocks edged cautiously higher Wednesday, while gold prices hit another all-time record, as investors braced for a crucial Federal Reserve rate decision, as well as commentary from Chairman Jerome Powell on the central bank’s new economic forecasts, later in the session.

Updated at 9:36 AM EDT

Green open

The S&P 500 was marked 21 points, or 0.38% higher in the opening minutes of trading, with the Nasdaq rising 107 points, or 0.61%.

The Dow gained 126 points while the mid-cap Russell 2000 nudged 3 points, or 0.13% higher  heading into this afternoon’s Fed rate decision.

“Investors are closely monitoring the potential impact that policy shifts on tariffs and government spending from the new administration might have on the financial markets,” said Joseph Gaffoglio, president and CEO of Mutual of America Capital Management.

“In addition, volatility in the markets has been compounded by concern over stretched valuations in certain sectors, especially within the AI market, as well as the outsized influence and negative performance drag of the Magnificent 7 stocks on the overall S&P 500,” he added.

S&P 500 Opening Bell Heatmap (Mar. 19, 2025)$SPY +0.31% 🟩$QQQ +0.50% 🟩$DJI +0.22% 🟩$IWM +0.24% 🟩 pic.twitter.com/2VImm2usNW

— Wall St Engine (@wallstengine) March 19, 2025

Updated at 8:02 AM EDT

Mortgage hit

U.S. mortgage rates nudged higher last week as bond markets continued to price in higher inflation forecasts tied to the tariff and economic policies of President Donald Trump.

The Mortgage Bankers’ Association reported that the average rate for a conforming 30-year fixed-rate loan rose 5 basis points to 6.72% over the period ended March 14, with refinancings down 12.8% and purchase applications rising 0.1%.

“Overall, purchase application volume is up 6% compared to last year at this time,” said the MBA’s chief economist, Mike Fratantoni. “Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring.”

US MBA Mortgage Applications W/o Mar 14: -6.2% (prev 11.2%)
– MBA 30 Yr Mortgage Rate: 6.72% (prev 6.67%)

— LiveSquawk (@LiveSquawk) March 19, 2025

Stock Market Today

Stocks ended sharply lower Tuesday, with the S&P 500 giving back most of its gains from earlier in the week and closing at levels seen prior to Friday’s late-session rally. 

The S&P 500 ended just over 1% lower. An underwhelming keynote from Nvidia  (NVDA)  CEO Jensen Huang at the tech giant’s GTC event pulled the Nasdaq 1.7% lower as Meta Platforms  (META)  became the last of the Magnificent 7 stocks to drift into negative territory for the year.

Market focus, however, is likely to switch firmly to the Fed’s rate decision at 2 pm Eastern Time, as well as the central bank’s new Summary of Economic Projects release, better-known as the Dot Plots, with expecting the new projections to show a modest reduction in GDP growth forecasts while a nudge higher in the inflation outlook..

Powell’s remarks to the press, and any comments he’s likely to make regarding the impact of President Donald Trump’s tariff and economic policies, will be closely scrutinized.

“Markets will be even more sensitive than usual
to Powell’s comments in the press confidence, but the [chairman] knows that strong predictions or signals of future action
are futile in the current environment,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. “And he is unlikely to be
drawn on how he would respond in hypothetical scenarios.”

“The danger of this approach, however, is markets are left
with little clarity on how the [rate-policy-making Federal Open Market Committee] will respond if the
trade war intensifies,” he added.

Related: Tariff uncertainty triggers record change to U.S. stock market outlook

Benchmark Treasury bond yields were little changed heading into the Wednesday session, with 10-year notes trading at 4.289% and 2-year notes hovering at 4.048%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.35% higher at 106.604 but remains pinned to its early-November lows.

Gold prices, meanwhile, rose another 0.52% to hit a fresh all-time high of $3,045.69 per ounce, taking the bullion’s year-to-date gain to around 15.5%.

On Wall Street, stocks are trending cautiously higher following last night’s selloff, which pegged the S&P 500’s year-to-date decline at 4.33%, with the futures contracts tied to the benchmark indicating an opening bell gain of around 12 points.

The Dow Jones Industrial Average, meanwhile, is called 53 points higher with the Nasdaq priced for a 56 point advance. 

More Economic Analysis:

• Retail sales add new complication to Fed rate cut forecasts
• CPI inflation surprise resets tariff talk
• Does Friday’s big rally mean the worst is over?

In overseas markets, Europe’s Stoxx 600 slipped 0.21% in midday Frankfurt trading, with Germany’s DAX down 0.23%. The market move followed yesterday’s vote in Germany’s lower house of parliament, which cleared the way for a new $550 billion defense and infrastructure fund.

Overnight in Asia, the Bank of Japan held its benchmark short-term lending rate steady at 0.5%, with Gov. Kazuo Udea noting the impact of U.S. policies on the country’s effort to reignite growth and inflation. 

“Japan’s wage and price conditions are on track, possibly stronger than expected,” Udea said. “But the uncertain U.S. and global outlook makes it difficult to assess the potential impact on Japan’s economy.”

“As such, we would like to look at upcoming data in early April, to reconsider our forecasts,” he added.

The Nikkei 225 closed 0.25% lower prior to the BoJ announcement, while the regional MSCI ex-Japan benchmark fell 0.19% into the close of trading following last night’s selloff on Wall Street. 

Related: Veteran fund manager unveils eye-popping S&P 500 forecast

Source link