Wall Street ends choppy session higher with focus firmly on Fed

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  • All eyes on Fed policy decision on Wednesday
  • Trading price with low probability of 100 bps rate hike
  • Take Two’s GTA VI Gameplay Footage Leaked Online
  • Knowbe4 jumps on take-private offer
  • Indices up: Dow 0.64%, S&P 0.69%, Nasdaq 0.76%

Sept. 19 (Reuters) – Wall Street’s major indices closed a seesaw higher Monday as investors turned their attention to this week’s policy meeting at the Federal Reserve and how aggressively it will raise interest rates.

Even more than the war in Ukraine or corporate earnings, the actions of the US central bank are fueling market sentiment as traders try to position themselves for a rising interest rate environment.

The S&P 500 (.SPX) and the Nasdaq (.IXIC) rebounded from registering their worst weekly percentage drop since June on Friday as markets were fully priced into a rate hike of at least 75 basis points at the end of the Fed’s Sept. 20-21 policy meeting, which saw the Fed fund futures a 15% chance showed a whopping 100 bps increase.

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The unexpectedly hot inflation figures from August last week also raised bets on increased interest rate hikes in the future, with the closing rate for US-fed funds now at 4.46%.

“This is all about what’s going to happen on Wednesday and what’s going to get out of the hands of the Fed on Wednesday, so I think people will just have to wait until then,” said Josh Markman, partner at Bel Air Investment Advisors.

“We had a bad printout when the CPI came in, so the Fed – which is behind the 8-ball – is now trying to lead the way and curb inflation, and that (awareness) is boosting the stock markets.”

As a result of caution on new bets ahead of the Fed meeting, just 9.58 million shares traded on US exchanges on Monday, the sixth lightest day for trading volume this year.

The focus will also be on new economic projections, which will be released Wednesday at 2 p.m. ET (1800 GMT) alongside the Fed’s policy statement. read more

Concerns about a Fed tightening have pushed the S&P 500 down 18.2% this year, with a recent report of poor performance from delivery company FedEx Corp. (FDX.N)an inverted yield curve for US Treasuries and warnings from the World Bank and the IMF about an impending global economic slowdown are exacerbating the misery. read more

Goldman Sachs lowered its forecast for US GDP for 2023 late Friday as it expects a more aggressive Fed and sees the unemployment rate rise higher than previously expected.

“The Fed will continue plowing, we’ll get 75 (bps) on Wednesday, but what comes after that and whether they’re going to take a break after Wednesday or not, that’s going to be the interesting part,” Bel Air’s Markman said. .

The Dow Jones Industrial Average (.DJI) rose 197.26 points, or 0.64%, to 31,019.68, the S&P 500 (.SPX) won 26.56 points, or 0.69%, to 3,899.89 and the Nasdaq Composite (.IXIC) added 86.62 points, or 0.76%, to 11,535.02.

A majority of the 11 S&P 500 sectors rose. An exception was health care (.SPXHC)a 0.6% decline due to a decline in shares of vaccine maker Moderna Inc (MRNA.O) a day after President Joe Biden said in a CBS interview that “the pandemic is over.” read more

industrial stocks (.SPLRCI) recovered 1.4% after a sharp decline on Friday, as banks (.SPXBK) 1.9% won. Tech Heavyweights Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) were up 2.5% and 1.9% respectively to give the S&P 500 and Nasdaq the biggest boost.

Take-Two Interactive Software Inc (TWO.O) closed 0.7%, after recovering from a slump earlier in the day caused by confirmation that a hacker had leaked the first footage of Grand Theft Auto VI, the next installment of the best-selling video game. read more

Meanwhile, Knowbe4 Inc (KNBE.O) rose 28.2% to $22.17, its highest closing price since May 4, after the cybersecurity firm said Vista Equity Partners had offered to take it privately for $24 a share, valuing the company at $4. 22 billion. read more

The S&P 500 posted a new 52-week high and 28 new lows; the Nasdaq Composite recorded 29 new highs and 378 new lows.

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Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru and David French in New York; Editing by Shounak Dasgupta, Anil D’Silva and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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