[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

Ahead of the Federal Reserve (Fed)'s key interest rate decision, the three major U.S. stock indices showed mixed trends on September 16 (local time) in the New York stock market.

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

The market considers it highly likely that the Fed will raise its benchmark interest rate by 0.25 percentage point at the September Federal Open Market Committee (FOMC) meeting. According to CME FedWatch, the interest rate futures market reflected a 92.9% probability of a 0.25 percentage point hike on this day.

Furthermore, expectations for additional rate hikes within the year are also growing. The probability of a 0.25 percentage point hike at the October meeting stands at 39.1%, while the probability of a hike at the December meeting is 26.4%. The current U.S. benchmark interest rate is 3.50% to 3.75% per annum.

Although the White House is pressing for a rate freeze, there are concerns in the market that if the Fed leaves rates unchanged, confidence in the central bank's determination to respond to inflation and its independence could be undermined.

Brent Wilsey, Chief Investment Officer (CIO) at Wilsey Asset Management, stated, "A rate freeze could shock the stock market," adding, "It could revive fears that the Fed is succumbing to political pressure and lower confidence in the central bank."

He pointed to the recent surge in diesel prices as the biggest variable in current inflation. Although rate hikes cannot directly lower diesel prices, he explained that they can suppress price increases in other sectors of the economy and thereby partially offset energy-driven inflation.

On September 11, U.S. diesel prices surpassed $6 per gallon for the first time ever, due to supply disruptions caused by the wars in Ukraine and Iran. While international oil prices have fallen somewhat from their recent highs, they are still above $100 per barrel.

This is due to growing concerns over crude oil transportation after Saudi Arabia halted operations of oil pipelines that were damaged in a drone attack. Previously, despite the closure of the Strait of Hormuz, oil transportation through the Red Sea was possible thanks to Saudi pipelines. The Saudi government has not announced a specific schedule regarding the extent of the damage or the duration of the shutdown.

Chris Wright, U.S. Secretary of Energy, stated in an interview with CNBC before the market opened that the pipeline shutdown would be "a brief, temporary stoppage lasting several days," which appears to have contributed to the recent decline in international oil prices.

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

As inflation concerns continue, U.S. Treasury yields remain high. The 10-year U.S. Treasury yield hovered just under 5%, and the 30-year yield was at 5.348%.

By sector, both energy and defense stocks are declining. ExxonMobil is down by 2.05%, Chevron by 1.71%, Lockheed Martin by 0.03%, AeroVironment by 1.47%, and RTX by 0.01%. Among financial stocks, Morgan Stanley is up 0.23%, and Blackstone is up 0.66%.

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.