After ending the previous session sharply lower, stocks are turning in a relatively lackluster performance during trading on Wednesday. The major averages are showing only modest moves on the day.
Currently, the major averages are turning in a mixed performance. While the Dow is down 56.45 points or 0.2 percent at 33,628.08, the S&P 500 is up 0.74 points or less than a tenth of a percent at 4,120.32 and the Nasdaq is up 42.47 points or 0.4 percent at 12,122.98.
The choppy trading on Wall Street come as trades look ahead to the Federal Reserve’s highly anticipated monetary policy announcement this afternoon.
With the Fed widely expected to raise interest rates by another 25 basis points, traders will pay close attention to the accompanying statement for clues about the outlook for rates.
CME Group’s FedWatch Tool is currently indicating an 87.4 percent chance the Fed will raise rates by 25 basis points to 5.25% and an 82.7 percent chance the central bank will subsequently leave rates unchanged in June.
“The Federal Reserve will announce its latest interest rate decision later today and investors will be hanging on their every word in light of recent banking sector instability,” said Craig Erlam, Senior Market Analyst at OANDA.
He added, “Today was always likely to mark the end of the US central bank’s tightening cycle – not that it has explicitly signaled this – but we’ve now reached a stage in which every rate hike could have unwanted and unintended consequences.”
On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. increased by much more than expected in the month of April.
ADP said private sector employment surged by 296,000 jobs in April after climbing by a revised 142,000 jobs in March.
Economists had expected private sector employment to advance by 148,000 jobs compared to the addition of 145,000 jobs originally reported for the previous month.
A separate report released by the Institute for Supply Management showed U.S. service sector activity grew at a slightly faster rate in the month of April.
The ISM said its services PMI crept up to 51.9 in April from 51.2 in March, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 51.8.