US equities were climbing as Treasury rates continued to fall, while investors awaited the release of the Federal Reserve’s September meeting minutes.
The Dow Jones Industrial Average was up 68 points, or 0.2%, at 11:01 ET (15:01 GMT), while the S& P 500 was up 0.2% and the Nasdaq was up 0.6%.
The major Wall Street indices finished higher Tuesday, as dovish comments from a few Federal Reserve officials stoked optimism that the central bank’s interest rate hikes are coming to a halt.
The Dow ended Monday 135 points, or 0.4%, higher, the S& P 500 gained 0.5%, and the tech-heavy Nasdaq climbed 0.6%.
Fed minutes in focus
Sentiment on Wall Street has improved this week as rates on US government bonds have fallen, reflecting both safe-haven purchases owing to the Middle East conflict and dovish words from Federal Reserve officials this week.
These remarks continued on Tuesday when Atlanta Fed President Raphael Bostic said that the central bank no longer needed to raise interest rates this year. On Wednesday, the 10-year Treasury rate fell back to 4.59%.
The focus now shifts to the imminent release of minutes from the Federal Reserve’s September meeting, when the rate-setting Federal Open Market Committee decided to hold borrowing prices constant.
At the time, the Fed hinted that another rate hike would be needed this year to help control stubbornly high inflation. The recent shift in tone has raised doubts about another rise, and investors will be seeking direction.
September producer prices
More Fed officials will speak on Wednesday, including Christopher Waller United States Federal Reserve Waller Speaks Latest Release:
Oct 11, 2023, Raphael Bostic and Michelle Bowman, although the majority of attention will be focused on the week’s first major inflation report, the September PPI release/
The headline figure for the September producer price index grew 2.2%, more than the predicted 1.6% for the year, and 0.5% for the month, more than the expected 0.3% for August. Core PPI increased 2.7% year on year, exceeding the predicted 2.3%, and 0.3% month on month, exceeding the expected 0.2%.
Exxon Mobil lines up Pioneer
In corporate news, Exxon Mobil Corp (NYSE: XOM) has agreed to buy competitor Pioneer Natural Resources (NYSE: PXD) in an all-stock transaction for roughly $60 billion, the largest acquisition by any firm this year. Exxon shares declined 4.4% while Pioneer shares increased 0.7%.
Crude recoups some of the week’s gains.
Oil prices fell further on Wednesday, but traders are still concerned about supply interruptions caused by the instability in the Middle East.
The market has largely calmed down after both crude benchmark futures surged somewhat more than 4% on Monday, but worries of political and economic contagion from the violence sparked by Hamas’s strikes on Israel linger.
Market players will also be looking for weekly oil inventory data from the American Petroleum Institute, which is expected a day later than normal due to Monday’s Columbus Day holiday.
