Last Fed meeting with Yellen in charge wraps up Wednesday
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U.S. stock-market indexes rose on Wednesday, with the S&P 500 and Dow trading in record territory, as investors looked past the widely anticipated interest-rate increase from the Federal Reserve in the afternoon.
What are futures doing?
The Dow Jones Industrial Average gained 106 points, or 0.4%, to 24,611, trading in record territory.
The S&P advanced 6 points, or 0.2%, to 2,670, also setting an intraday high. Closing at records on Wednesday would mark the fourth consecutive record run for both indexes. Of the 11 main sectors, eight were trading higher. Financials, energy and telecoms were the only laggards, while technology shares led the gains, up 0.5%.
The Nasdaq Composite Index rose 28 points, or 0.4%, to 6,890.
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What's driving the markets?
Traders were waiting for the Fed's interest-rate decision, due at 2 p.m. Eastern Time. The central bank is widely expected to raise rates by 25 basis points (http://www.marketwatch.com/story/heres-why-the-fed-will-hike-interest-rates-2017-12-11), so traders will look for any hints on the pace of tightening next year. The monetary policy meeting also marks the last for Janet Yellen as chairwoman and she will deliver her final news conference as central bank boss at 2:30 p.m.
The consumer price index climbed 0.4% in November (http://www.marketwatch.com/story/higher-gas-prices-boost-inflation-squeeze-paychecks-in-november-cpi-finds-2017-12-13), matching the MarketWatch forecast. Three-quarters of the increase reflected higher gas prices. However, core rate of inflation that strips out food and energy rose a smaller 0.1%. The disappointment in core inflation sent bond yields and the dollar lower.
Ahead of the market open, U.S. stock futures dipped initially after Democrat Doug Jones won Alabama's Senate election (http://www.marketwatch.com/story/doug-jones-defeats-roy-moore-in-contentious-alabama-senate-election-2017-12-12)Tuesday night, defeating controversial Republican Roy Moore, but recovered close to the market open.
The Democrat's victory will shrink the Republican Senate majority, leaving the balance at 51-49. That has raised concerns that it will be harder for the Republicans to push through major overhauls, such as tax reform, and that the governing party will struggle in the 2018 midterm elections.
However, the tax overhaul may not be threatened, as GOP leaders in Congress are rushing to clear the tax legislation by early next week before Jones arrives in Washington, a Wall Street Journal report noted (https://www.wsj.com/articles/democrat-doug-joness-win-in-alabama-senate-wont-affect-gop-tax-overhaul-1513139848).
Read:Here's why the Fed will hike interest rates on Wednesday (http://www.marketwatch.com/story/heres-why-the-fed-will-hike-interest-rates-2017-12-11)
What are strategists saying?
"Democrats will scream to delay the tax vote, but that won't happen unless at least two Republicans agree to that, an unlikely outcome," said James M. Meyer, chief investment officer at Tower Bridge Advisors in a note.
"The election of Mr. Jones will also stall other purely partisan initiatives in 2018, especially yet another possible attempt to repeal and replace Obamacare," Meyer said.
"The victory of Democrat Doug Jones for a U.S. Senate seat in Alabama is a major setback for President Trump's legislative agenda beyond the tax bill," said Philip Marey, senior U.S. strategist at Rabobank, in a note. "This will increase the pressure on the Republicans to pass a tax bill before the end of the year."
"The focus is firmly on the FOMC," said analysts at London Capital Group, in a note. "Given that it is Janet Yellen's final session as chair, forward guidance could come up disappointingly short."
Which stocks are in focus?
Shares of Hasbro Inc(HAS) rose 3.2% on Wednesday, while it was not clear what sparked the rally.
Shares of CentruryLink Inc(CTL) jumped by 3% after analysts at Morgan Stanley raised their price target. The stock is up 17% over the past week, largely thanks to a five-year contract with the state Pennsylvania to provide data networking services to its employees.
Shares of Twenty-First Century Fox, Inc(FOX) dropped more than 3% amid concerns over the deal with Disney.
Among big winners on Wall Street were industrials companies. Shares of Caterpillar Inc.(CAT) and Arconic Inc.(ARNC) rose more than 2%.
What are other markets doing?
Stocks in Europe (http://www.marketwatch.com/story/european-stocks-step-back-from-highest-in-5-weeks-but-retailers-gain-ground-2017-12-13) traded lower, with the Stoxx Europe 600 index down 0.2% to 390.99. Asian markets (http://www.marketwatch.com/story/japans-nikkei-falls-as-chip-stocks-decline-yen-rises-2017-12-13)closed mixed. Japan's Nikkei Stock Average (NIK.V) ended down 0.5% on fresh declines in chip-related companies.
The dollar moved lower (http://www.marketwatch.com/story/dollar-slips-after-democrats-senate-win-in-alabama-sparks-concerns-about-tax-bill-2017-12-13) after the inflation data, with the ICE U.S. Dollar Index down 0.2% at 93.903
The 10-year Treasury yield was at 2.38%, after retreating from 2.42% earlier following the consumer-inflation report.
Oil prices ticked 0.1% lower to $57.06 a barrel (http://www.marketwatch.com/story/oil-prices-rise-on-signs-of-falling-us-inventories-2017-12-13). Gold futures were up 0.6% at $1,248 an ounce.
Bitcoin futures retreated below the $18,000 mark (http://www.marketwatch.com/story/bitcoin-futures-fall-below-18000-as-cryptocurrency-itself-drops-under-17000-2017-12-13) in their third full day of trading, while the spot price for the No.1 digital currency traded around $17,000.
(END) Dow Jones Newswires
December 13, 2017 11:02 ET (16:02 GMT)