Investing.com — Stocks on Wall Street struggled for direction on Wednesday amid caution ahead of a landmark Federal Reserve decision that is likely to result in the first interest rate cut since March 2020.
At 12:57 p.m. ET (1657 GMT), the benchmark, tech-heavy index was unchanged and the 30-stock index .
Markets see higher probability of 50 basis point cut
The Federal Reserve is widely expected to cut borrowing costs from a more than two-decade high of 5.25% to 5.5% following its latest two-day meeting.
CME Group’s closely watched FedWatch tool showed traders put the probability of a 50 basis point cut at 61% and the probability of a 25 basis point reduction at 39%.
However, analysts at ING said the decision was still “very close.” In the last data before the announcement, U.S. retail sales unexpectedly rose in August, indicating consumer resilience and broader economic strength.
These trends, coupled with recent mixed inflation figures and cooling labor demand, could make things even more complicated for Fed officials.
Along with the projected cut, the Fed will also release an updated version of policymakers’ rate projections, possible changes to its official statement, and a news conference with Chairman Jerome Powell.
Traders are likely to be looking for any indication of how the Fed plans to approach a potential easing cycle, as markets currently expect cuts of at least 100 basis points by the end of 2024.
US Steel rises on news of Nippon Steel deal extension; Intuitive Machines rises on $5 billion NASA contract
United States Steel (NYSE:) shares rose after Bloomberg News reported that Nippon Steel had won an extension on the review of its $14.1 billion proposal for the U.S. steelmaker. A decision is now likely to be made only after the 2024 election in November.
Intuitive Machines Inc (NASDAQ:) rose 51% after winning a $5 billion contract from NASA to provide lunar navigation and communications services.
In retail stocks, Victoria’s Secret & Co (NYSE:) was a standout performer, rising 5% after Barclays upgraded the lingerie maker from underweight to equal weight, citing a more balanced valuation.
(Scott Kanowsky and Ambar Warrick contributed reporting.)