Dow falls ahead of Fed decision
The Dow slumped Tuesday, as investors are getting jittery ahead of the Federal Reserve’s interest rate decision.
The Dow closed down 0.1%, while the S<><><><><><><><><><><><><><><><><><><><><>&P 500 was down 0.3%. The Nasdaq Composite was down 0.2%./ppThe Fed’s two-day monetary policy meeting kicks off Tuesday morning and culminates in its interest rate decision at 2 pm ET Wednesday./ppThe US dollar, measured by the ICE US Dollar Index, is up 0.1%, and the 10-year US Treasury bond yields are little changed at 2.0510%./ppThe central bank is expected to cut rates by a quarter percentage point. That has been expected and priced in for weeks. The market reaction could be much more driven by the forward guidance and language from Fed Chairman Jerome Powell. Market participants will be watching for clues whether there will be more rate cuts in the future, perhaps as early as September./ppOn Friday, the US Labor Department will release its July jobs report. If it comes in better-than-expected, a href=”https://www.cnn.com/2019/07/26/economy/gdp-q2/index.html” target=”_blank”just like GDP data last week/a, expectations for a September rate cut could slip. Stocks could drop in lockstep, as lower interest rates are good for companies./ppPresident Donald Trump told reporters the Fed should have acted sooner in cutting rates and stimulating the economy, according to CNBC. Trump also said the Dow would be 10,000 points higher if it wasn’t for the Fed’s policies./ppBecause the Fed has been a main driver of the recent stock rally, the central bank’s rate decision is overshadowing everything else this week./ppUS and Chinese trade representatives are meeting in Shanghai starting today, though the market doesn’t have high hopes for the outcome. a href=”https://twitter.com/realDonaldTrump/status/1156159999833513984″ target=”_blank”President Donald Trump tweeted/a earlier that China was doing “very badly” and wasn’t buying the US agricultural products it promised to buy./pp”That is the problem with China, they just don’t come through,” he wrote./p