Wall Street records modest gains as FOMC meeting gets underway

Eren Sengezer FXStreet

Major equity indexes in the U.S. on Tuesday traded in relatively narrow ranges on Tuesday but were able to close higher led by gains financial and technology shares.

Rising Treasury-bond yields boosted the S&P Financials Index, which closed the day 0.8% higher. Commenting on the robust performance of bank stocks, "there's one school of thought that rates will go up because there's some inflation coming from a very tight labor market and storms that will create very tight demand," Rick Meckler president of LibertyView Capital Management in Jersey City, New Jersey, told Reuters.

Market speculation over the possibility of a merger between two of the biggest U.S. wireless carriers T-Mobile and Sprint helped the telecom services sector .SPLRCL add nearly 2% and become the best performing sector of the day. This move also lifted the technology sector 0.5% higher.

On Wednesday, market action in the first half of the session is expected to remain subdued before the FOMC releases its monetary policy statement. "People are in wait-and-see mode. The expectations are that rates will remain unchanged and they (the Fed) will start balance sheet unwinding. But there's always a possibility of surprise. I think that's why investors are cautious," Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusett, told Reuters on Tuesday.

The Dow Jones Industrial Average added 40.45 points, or 0.18%, to 22,371.80, the S&P 500 rose 2.74 points, or 0.11%, to 2,506.64 and the Nasdaq Composite gained 6.14 points, or 0.1%, to 6,460.78.

Headlines from the NA session:

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.