Stock Market Today: Dow ends lower as Treasury yields jump ahead of Fed decision
Investing.com — The Dow closed lower Tuesday, as Treasury yields rose to their highest level in more than a decade on fresh inflation concerns as investors awaited the Federal Reserve monetary policy update due Wednesday.
The Dow Jones Industrial Average fell 0.3%, 106 points, Nasdaq fell 0.2%, and the S&P 500 fell 0.2%.
The 2-year and 10-year Treasury yields closed at their highest levels since 2006 and 2007, respectively, amid ongoing signs of economic growth and fresh inflationary fears following the recent spike in oil prices.
The recent climb in the oil prices comes just as the Federal Reserve kicked off its two-day meeting that is expected to culminate in unchanged rate decision on Wednesday.
But the updated summary of economic projections, which will accompany the decision, and Fed chairman Jerome Powell's comments will dominate investor attention amid expectations that the Fed is unlikely to hike rates again.
«I don't think they're going to do the additional hike in November because the inflation data will be good enough that they won't feel like they need to,» Chief Strategist Rhys Williams of Spouting Rock Asset Management told Investing.com's Yasin Ebrahim in an interview on Tuesday.
But a pick in medical costs, a potential easing in rent deflation and ongoing increase in energy prices could rejuvenate inflation early next year, increasing the risk of a further Fed tightening in the first quarter, Williams added.
«I think the risk would be in the first quarter that they do a an additional hike if in fact inflation picks back up,» Williams said.
The projections are likely to show upgrades to “growth and the labor market and a downward revision to inflation, at least in 2023,” it added.
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