The Dow Jones Industrial Average posted modest gains on Wednesday, as investors turned their attention to monetary policy.
The Dow and broader U.S. stock market opened higher on Wednesday, as investors awaited the Federal Reserve’s first policy decision since Jerome Powell unveiled its new inflation-targeting strategy.
All of Wall Street’s major indexes reported gains, with the Dow Jones Industrial Average rose by as much as 94 points after the open.
Salesforce.com and Dow Inc. were the Dow’s top performers. Home Depot and Microsoft also reported solid gains.
The technology-focused Nasdaq Composite Index rose 0.4%.
A measure of implied volatility known as the CBOE VIX was rangebound on Wednesday. The so-called ‘investor fear index’ hovered between 24.92 and 25.65 on a scale of 1-100, where 20 represents the historical average.
Members of the Federal Open Market Committee (FOMC) will conclude their two-day policy meeting on Wednesday. Although interest rates will remain on hold, officials could adjust their language to reflect the new inflation-targeting strategy adopted last month.
On Aug. 27, Chairman Jerome Powell announced that the Fed would allow inflation to run higher than the standard 2% target–setting the stage for years of zero-bound interest rates. Watch the video below:
The Fed’s official policy statement could reveal more information about how it plans to keep rates anchored for the foreseeable future. Economists polled by CNBC say interest rates will likely remain at zero until 2023.
The central bank’s policy statement will be accompanied by quarterly economic projections covering GDP, unemployment, and inflation. The ‘dot-plot’ chart of interest rate forecasts will also be released alongside the economic indicators.
On the data front, U.S. retail sales appear to have slowed in August. Receipts at retail stores rose 0.6%, down from 0.9% the previous month, the Department of Commerce reported Wednesday. Analysts were expecting gains of 1%.
Last modified: September 23, 2020 2:31 PM