Statues adorn the facade of the New York Stock Exchange in New York. (AP Photo/John Minchillo)
NEW YORK (AP) — Stocks were mixed in early trading this morning, as investors braced for a two-day meeting of the Federal Reserve this week where it’s expected the central bank will raise interest rates sharply to combat inflation.
The S&P 500 index was up less than 0.1 percent, fluctuating between gains and losses, while the Dow Jones Industrial Average was up 0.2 percent. The technology-heavy Nasdaq Composite was down 0.2 percent.
On Wednesday, most economists expect the Fed to announce its second 0.75 percent point increase in its short-term rate in a row, a hefty increase that it hasn’t otherwise implemented since 1994. That will put the Fed’s benchmark rate in a range of 2.25 percent to 2.5 percent, the highest since 2018.
The U.S. economy is slowing, but healthy hiring shows it is not yet in recession, Treasury Secretary Janet Yellen said Sunday on NBC’s “Meet the Press.” She spoke ahead of the release this week of a slew of economic reports that will shed light on an economy currently besieged by rampant inflation as interest rates rise.
Some early signs suggest that inflation may be cooling down from red-hot levels. Auto club AAA said on its website as of this morning that the average price of a gallon of regular gas is $4.36 per gallon. That’s down 16 cents from a week ago, and 55 cents cheaper than late June, when the average price was $4.91 per gallon. Crude oil prices have fallen nearly 10 percent this month alone.
Outside of the Fed meeting, the highest-profile report will likely be Thursday, when the Commerce Department releases its first estimate of the economy’s output in the April-June quarter. Some economists forecast it may show a contraction for the second quarter in a row. The economy shrank 1.6 percent in the January-March quarter. Two straight negative readings is informally considered a recession.
Earnings will be quiet today, but pick up later this week when technology heavyweights like Apple, Meta, Microsoft and Amazon all report their results. Other big companies reporting this week include Coca-Cola and McDonald’s, where investors may look to see the impact of inflation on these inflation-conscious, consumer-facing companies.
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