logo-loader

US stocks close with solid gains after Fed holds off on tapering for now

Last updated: 16:05 22 Sep 2021 EDT, First published: 12:05 22 Sep 2021 EDT

Jerome Powell. chairman of the Fed

4:05pm: US equities end higher on Fed statement

US stocks closed with solid gains after the Federal Reserve suggested its monetary stimulus policy will remain intact until 2022.

The central bank has been buying each month $120 billion worth of Treasurys and mortgage-backed securities since the start of the COVID-19 crisis. The Federal Open Market Committee voted unanimously to keep short-term rates anchored near zero on Wednesday.

On the day, the DJIA jumped by 338 points, or 1%, to 34,258, while the S&P 500 increased 0.95% to 4,395. 

And the tech-heavy Nasdaq increased 1.02% to 14,896.

12.05 pm: Investors shrug off fallout fears from China Evergrande debt troubles

US stocks climbed in noon trading ahead of this afternoon’s Federal Reserve’s decision on monetary policy, as investor fears of a fallout from the potential default of Chinese property giant China Evergrande subsided somewhat.

At midday, the Dow jumped 448 points, or 1.3%, to 34,368, while the S&P 500 added 53 points at 4,407 and the tech-heavy Nasdaq gained 161 points to 14,907.     

“A dovish Fed (or even a Fed that meets expectations) could provide more of a relief rally today, but we continue to think the sheer number of unknowns remain a headwind that will keep markets volatile for the next few weeks, until there’s more clarity on the Fed, taxes, government funding and earnings,” Sevens Report founder Tom Essaye said.

Notable movers included shares of FedEx (NYSE:FDX) Corp, which sank more than 8% after the shipping giant posted weaker-than-expected quarterly earnings and also cut its forecast for the year.

11.05am: Proactive North America headlines:

BlueRush says fiscal first quarter is off to an ‘excellent’ start with growth to customer base

Global Energy Metals and American Battery Metals align to bolster North American mineral and energy independence

Bam Bam Resources (CSE:BBR) says its Majuba Hill copper project has over 1 billion ton potential

Kintara reports topline results from Phase 2 clinical study of VAL-083 for newly-diagnosed GBM patients

Klondike Gold posts encouraging drill results from Lone Star Zone at flagship Klondike District project

Bhang to collaborate with Belushi’s Farm and Blues Brothers on co-branded product

Marble Financial says subsidiary Inverite reports record growth and transaction volume milestones

Ridgeline Minerals (TSX-V:RDG, OTCQB:RDGMF, FRA:0GC0) strikes US$20M earn-in agreement with Barrick-Newmont joint venture Nevada Gold Mines for its Swift project

CytoDyn says Brazil approves pivotal Phase 3 clinical trial of leronlimab in critically ill coronavirus patients

Spyder Cannabis enters deal to distribute RELX vape products

BetterLife Pharma enrolls first patient in interferon alpha-2b COVID-19 trial in Chile

Esports Entertainment partners with The Coalition to run Gears 5 video game tournament

Esports Entertainment partners with The Coalition to run Gears 5 video game tournament

Psyched Wellness (CSE:PSYC, FRA:5U9, OTCQB:PSYCF) included in high-profile AdvisorShares Psychedelics Exchange Traded Fund

Q BioMed says its MAN-19 therapeutic for Acute Respiratory Distress Syndrome (ARDS) poised to start clinical trials next year

Recruiter.com expands marketing team with appointment of Angela Copeland as its vice president of marketing

Adyton Resources (TSX-V:ADY, OTCQB:ADYRF) discovers new exploration targets at its Gameta and Wapolu deposits in Papua New Guinea

Zoglo’s Incredible Food to list 'Incredible' products with Canadian food retailer FreshCo

Cypress Development acquires two dozen strategic mining claims in Nevada

Pure Gold Mining releases final short form prospectus to raise $20.04M

Biocept implements COVID-19 testing services at more than 30 community college campuses across California

Fobi Data Exchange launches with first partner, leading UK platform In-Touch Group

Algernon Pharmaceuticals files pre-IND meeting request with FDA for Ifenprodil small cell lung cancer study

Water Tower Research says CleanSpark ‘well-positioned to capitalize’ on microgrid market growth while scaling its Bitcoin mining operations

SpotLite360 IOT Solutions (CSE:LITE) strikes a reseller agreement with Apollo Science for its SaaS platform

Small Pharma starts Phase II of DMT-and-psychotherapy treatment for depression

Mydecine Innovations Group reports positive pre-clinical data for MYCO-003 and updates on patent progress

Vuzix receives follow-on order from Fortune 50 customer to support supply chain operations

Falcon Gold commences phase 2 at Spitfire-Sunny Boy project in British Columbia

African Gold Group renews its Faraba exploration permit to further increase its exploration upside

CanaFarma announces LOI to acquire Avitas Bio to boost health and wellness platform

9.50am: US stocks head higher

US benchmarks started the midweek session in New York higher as attention focuses on the Fed news later.

The Dow Jones Industrial Average added around 158 points at 34,078, while the S&P 500 went up over 16 points at 4,370. The tech laden Nasdaq index added over 26 points at 14,772.

In London, FTSE 100 added over 95 points, or 1.36%, at 7,075.

"Ahead of the outcome of the Federal Reserve’s policy meeting and Powell’s press conference later, the markets have stabilised further," noted Fawad Razaqzada, analyst at ThinkMarkets.com.

"European indices were sharply higher by mid-day in London, lifting US futures, along with many other risk assets such as copper and oil. In FX, risk sensitive commodity dollars were firmer with the pound and yen weaking against the US dollar."

7.10am: US futures making gains

US stock futures are climbing higher on Wednesday as all attention turns to the start of today's Fed policy meeting.

Futures for the Dow Jones Industrial Average are up 222 points, while S&P 500 futures are trading more than 26 points higher. The Nasdaq exchange is ahead by around 56 points.

European shares rallied on Tuesday but Wall Street was more muted. The S&P 500 closed lower, off three points at 4,354; the Dow Jones had a more pronounced loss dropping 50 points to end the day at 33,919. The Nasdaq managed to edge out a gain, advancing 32 points to 14,746.

Traders today await more from the Fed on when it will begin easing back on its quantitative easing (QE) though Neil Wilson, analyst at Markets.com, suggested that what the US central bank says on interest rates may be of more significance.

In a note, he said this week's meeting may be an "appropriate moment" for the Fed to give the market fair warning on tapering, or not.

"In a sense it doesn’t matter much what they say or don’t say on tapering – the risk lies in what the Fed does or doesn’t say about rate hikes. And though Monday’s market sell off may have caught the Fed off guard, with stocks just 4% off record highs there is not any reason for panic right now," he said.

"Stocks have been rolling over since the weak jobs report, and Fed officials should be prepared to look through some softer data and mild pullbacks in equity markets," he added.

Wilson noted there was a "broad consensus" in markets that the Fed would begin dialling back the pace of its stimulus measures this year, likely to be November, but maybe December.

Stock markets on both sides of the Pond have been jittery this week, not least due to the trouble in the Chinese property market, especially the situation of its largest home builder Evergrande.

Five more things to look out for on Wednesday:

The Evergrande saga rumbles on, with an onshore unit of the Chinese property giant saying on Wednesday it would make an interest payment on time this week but Evergrande is still expected to miss a separate payment due on its dollar bonds, which are widely held by international investors.

Data on existing US home sales for August will be released at 10am ET. Existing home sales recovered sharply to a 5.990 million annual rate in July and analysts expect August’s sales to decline slightly to a 5.900 annual rate.

Signals from the Federal Reserve will be closely watched by bond markets today. The yield on the US 10-year Treasury note rose to 1.328% Wednesday compared to 1.323% Tuesday. Yields rise when prices fall.

The US Energy Information Administration’s (EIA) weekly report on petroleum inventories is scheduled for release at 10.30am ET.

FedEx (NYSE:FDX) Corp has reported weaker-than-expected earnings for its first quarter, while sales exceeded estimates. The company has also lowered its guidance for full year 2021.

Xeris Biopharma Surpasses 2023 Expectations with Strategic Moves Poised for...

Xeris Biopharma CEO Paul Edick joined Steve Darling from Proactive to share news the company had a successful 2023, with a final tally of 164 million USD, which is at the upper end of their forecast. The company concluded the year with 72 million USD in cash, surpassing their initial projections...

9 hours, 18 minutes ago