US open: Stocks trade higher ahead of FOMC decision
By Iain Gilbert
Date: Monday 18 Oct 2021
(Sharecast News) - Wall Street trading got off to a positive start on Wednesday as market participants await this evening's Federal Reserve interest rate decision with bated breath.
As of 1530 BST, the Dow Jones Industrial Average was up 1.08% at 34,286.68, while the S&P 500 was 0.89% firmer at 4,392.80 and the Nasdaq Composite came out the gate 0.70% stronger at 14,849.84
The Dow opened 366.84 points higher on Wednesday, reversing losses recorded in the prior session.
Wednesday's primary focus will be the outcome of the Federal Reserve's two-day policy meeting, with the central bank likely to prepare market participants for the removal of monetary stimulus as chairman Jerome Powell has previously indicated that tapering of the Fed's $120.0bn bond-buying programme could begin before the end of 2021.
Also in focus was embattled Hong Kong-listed property developer Evergrande, which is at risk of a possible default if the firm can't get together the millions of dollars for debt payments on its US dollar-denominated bonds before the end of the week, with investors fearful of a step down in global economic growth if China decelerates its property market too much or allows the real estate giant to fail.
However, sentiment got a slight boost overnight following word that Evergrande would be able to cover its interest payments on time thanks to a mainland-traded bond denominated in Chinese yuan.
On the macro front, mortgage applications in the week ended 17 September increased 4.9%, according to the Mortgage Bankers Association, up from a 0.3% increase in the previous week, principally due to a surge in refinancing activity, although purchases did also creep higher as well.
Elsewhere, existing home sales fell in August, with supply remaining constrained and prices accelerating further. According to the National Association of Realtors, existing home sales dropped 2.0% to a seasonally adjusted annual rate of 5.88m units last month as sales fell in all four regions. Home resales, which account for the majority of US home sales, were down 1.5% year-on-year.
Still to come, the FOMC's interest rate decision and economic projections were slated for release at 1900 BST, ahead of the central bank's press conference at 1930 BST.
In the corporate space, General Mills beat on quarterly sales estimates, while Blackberry will publish its latest results after the close.
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