Wall Street opens mixed ahead of FOMC

  • Core inflation in US stays unchanged at 2.3% on a yearly basis in November.
  • FOMC is expected to keep its policy rate steady at 1.5% - 1.75% range.
  • Defensive sectors post modest losses in early trade.

Wall Street's main indexes started the day mixed as investors are gearing up for the Federal Reserve's last meeting of the year. As of writing, the Dow Jones Industrial Average was down 0.1% on the day while the S&P 500 and the Nasdaq Composite were up 0.17% and 0.22% on a daily basis.

Earlier in the day, the data published by the US Bureau of Labor Statistics showed that inflation, as measured by the core Consumer Price Index (CPI), stayed unchanged at 2.3% on a yearly basis in November as expected and was largely ignored by the market participants.

Among the 11-major sectors, the defensive Real Estate and Consumer Staples indexes are posting small losses in the early trade but the market sentiment is unlikely to improve ahead of FOMC announcements.

Previewing the FOMC's updated economic projection, "Base case is for the dot plot update to show monetary policy on hold in 2020," Goldman Sachs analysts said and elaborated further.

"There could be either a dovish or hawkish surprise. Hawkish if more FOMC participants project one rate hike in 2020 or two hikes in 2022. Dovish if the median long-run dot declines from September's 2.5% level or participants see higher inflation as a prerequisite for the next rate hike."

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