On the 10th (U.S. Eastern time), U.S. stocks opened little changed as investors awaited the Federal Open Market Committee (FOMC) decision on its benchmark interest rate.
Right after the open, the three major indexes — the Dow Jones Industrial Average, the S&P 500 and the Nasdaq — seesawed slightly as markets stayed cautious. S&P 500 and Nasdaq futures also moved around ±0.1% before the open, failing to find direction as the wait-and-see mood continued.
In the market, the prevailing view is that the Fed will cut the benchmark rate one more time today. However, with Commissioners increasingly divided over the pace and path of additional cuts next year, the possibility of a so-called "hawkish cut" is also being discussed. The 10-year U.S. Government Bonds yield fluctuated in the 4.2% range near its high for the year, heightening caution about growth stocks and valuation pressures.
By sector, banks, real estate and utilities, which are vulnerable to a high-rate environment, showed a mixed performance by individual names early in the session. Energy stocks, which move with international oil prices, are cited as relatively strong as a decline in U.S. crude inventories and expectations of tight supply come into focus.
In the market, ▲ the Fed's rate decision and dot plot, ▲ the tone of Chair Powell's press conference, and ▲ the reassessment of growth, financial and energy stocks depending on the moves in rates, the dollar and oil are cited as the key variables for today's session.
In particular, if a scenario emerges in which the Fed cuts but limits signals of additional cuts, there is also the possibility of short-term volatility accompanied by sector rotation.