“The recovery from the lows of Monday and Tuesday continued today, even as investors focused on what the Fed might say this evening. Geopolitical tensions have resulted in a trimming of gains, but overall a wave of buying has swept over markets today.”

Stock prices climb as countdown to FOMC begins

“The latest Fed decision is only hours away, but the allure of buying the dip remains too strong for many to resist. Equities have picked themselves up off the lows of the week, with price action around Microsoft providing a template for this week, where initial weakness is replaced with buying. The recent pullback has driven stocks back down towards more attractive valuations, and so long as they can avoid any nasty surprises most earnings may well prompt investors to buy back in.”

Bank of Canada foreshadows Fed

“The Bank of Canada surprised markets by keeping rates unchanged, but provides a guide for what might come this evening, with its warning of rate hikes later in the year. The bank thinks inflation will peak later in the year, something that the Fed still likely suspects to be the case. So much hawkishness appears to have been priced in from Jerome Powell that he might find it hard to live up to expectations.”

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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