Wall Street Mixed Ahead of Fed Decision; Intel Gains on Partnership Rumors
Wall Street experienced a mixed trading session as investors awaited the Federal Reserve's interest rate decision, seeking to recover from earlier declines. A dip in oil prices and moderating bond yields provided some relief, particularly for technology stocks. However, the market's sentiment remained cautious ahead of the Fed's announcement, with a 0.25% rate hike largely priced in, shifting focus to future policy guidance.
The Dow Jones Industrial Average saw a slight decrease, while the S&P 500 and Nasdaq Composite posted modest gains. This followed a weak start to the week, during which AI and chip stocks faced pressure amid calls to slow AI development, alongside rising oil and bond yields. The market experienced broader declines on Tuesday, with all three major indices falling.
Easing pressure from oil prices offered some support, as Brent crude and WTI futures traded lower after recent spikes. Despite this, concerns about energy's impact on inflation persist due to high price levels. The bond market also showed signs of stabilization, with the 10-year US Treasury yield falling back below the 5% mark, a level not seen since 2007, though financing costs remain elevated.
Domestically, US retail sales for August exceeded expectations, rising 1.2% and indicating continued consumer spending despite high energy prices and borrowing costs. This data adds complexity to the Fed's deliberations on the need for further monetary tightening.
Attention is now fixed on the Fed's policy statement and Chair Jerome Powell's subsequent press conference for clues on future rate hikes and the central bank's outlook on inflation and economic activity. Meanwhile, Intel shares rose significantly following reports of potential memory chip production collaborations with SK Hynix, while other tech and defense-related companies also saw movement.
Israeli companies listed on Wall Street showed varied performance. Teva Pharmaceuticals is advancing its "Pivot to Growth" strategy with expanding innovative drug sales and debt reduction. Ondas Networks announced the acquisition of Israeli company GATE Technologies for up to $390 million. SolarEdge's growth prospects are under scrutiny, with analysts awaiting validation of its new storage systems. Cellebrite is undergoing a corporate restructuring to establish a US parent company, with operations in Israel remaining unaffected.
