[New York Stock Exchange] September FOMC Rate Hike Expectations Grow... S&P 500, Nasdaq Rise

US Energy Secretary: "Temporary Suspension"...
International Oil Prices Downtrend
92.9% Chance of FOMC Rate Hike
Major Semiconductor Stocks on the Rise

On September 16 (local time), ahead of the U.S. Federal Reserve (Fed)'s decision on its benchmark interest rate, the three major indices on the New York Stock Exchange showed mixed performance.

At 9:43 a.m. on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was trading at 51,991.95, down 101.16 points (0.19%) from the previous trading day. The S&P 500 Index, which focuses on large-cap stocks, rose by 15.49 points (0.20%) to 7,601.22, while the tech-heavy Nasdaq Index increased by 133.21 points (0.51%) to 26,114.78.

The market sees a high probability that the Fed will raise the benchmark interest rate by 0.25 percentage points at the September Federal Open Market Committee (FOMC) meeting. According to CME FedWatch, the interest rate futures market priced in a 92.9% likelihood of a 0.25 percentage point hike as of today.

Furthermore, the chances of additional rate hikes within the year are increasing. The probability of another 0.25 percentage point increase at the October meeting stands at 39.1%, while the likelihood of a hike at the December meeting is at 26.4%. Currently, the U.S. benchmark interest rate stands at 3.50~3.75% per annum.

Although the White House has been pressuring for a rate freeze, concerns have emerged in the market that if the Fed keeps rates unchanged, confidence in the central bank's commitment to responding to inflation and its independence could be damaged.

Brent Wilsey, Chief Investment Officer (CIO) of Wilsey Asset Management, analyzed, "A rate freeze could shock the stock market," adding, "It could also revive concerns that the Fed has succumbed to political pressure and undermine the central bank's credibility."

He pointed to a surge in diesel prices as the biggest factor driving recent inflation. While a rate hike may not directly lower diesel prices, he explained that it could curb price increases in other sectors of the economy, thereby partially offsetting energy-driven inflation.

In the United States, diesel prices surpassed $6 per gallon for the first time ever on September 11, due to supply disruptions caused by the wars in Ukraine and Iran. International oil prices have declined somewhat from recent highs but still remain above $100 per barrel.

This situation was triggered when Saudi Arabia halted the operation of an oil pipeline following a drone attack, increasing concerns over oil transportation. Previously, even after the Hormuz Strait was closed, oil shipments were possible via the Red Sea, thanks to Saudi pipelines. However, the Saudi government has not provided specific details regarding the scale of the damage or how long the operations will be suspended.

U.S. Secretary of Energy Chris Wright stated in a pre-market interview with CNBC that the suspension of pipeline operations would be "brief and temporary, lasting only a few days," which appears to have led to the downward trend in international oil prices.

As of now, on the New York Mercantile Exchange, West Texas Intermediate (WTI) crude oil for October delivery is down 2.29% from the previous session, trading at $103.57 per barrel. On the ICE Futures Exchange, Brent crude for November delivery is down 1.44% from the previous session, trading at $107.19 per barrel.

With inflation concerns persisting, U.S. Treasury yields remain elevated. The 10-year Treasury yield fell slightly below 5%, while the 30-year Treasury yield stood at 5.348%.

By sector, both refining and defense stocks are declining. ExxonMobil is down 2.05%, Chevron down 1.71%, Lockheed Martin down 0.03%, AeroVironment down 1.47%, and RTX down 0.01%. In contrast, financial stocks such as Morgan Stanley (+0.23%) and Blackstone (+0.66%) are rising.

Looking at semiconductor and technology stocks, Micron Technology is up 0.94%, Cisco Systems up 0.28%, Qualcomm up 1.08%, Applied Digital up 5.34%, Intel up 4.36%, and Broadcom up 0.85%.

This content was produced with the assistance of AI translation services.