Dow rises nearly 200 points as Fed decision nears: Live updates

After making blockbuster public trading debuts, shares of Arm Holdings and Instacart are quickly reversing their early gains. 

Chip designer Arm saw its shares tumble 4.2%, their lowest level since it began trading Thursday. The stock jumped nearly 25% on its first day of trading, but has suffered daily declines since. Shares are trading just 3.3% above their IPO price, as of midday Wednesday. 

Instacart shares declined 5.2% Wednesday, just one day after it started trading on the Nasdaq. Shares rose 12% higher Tuesday.

Investors who want to make changes to their portfolios this afternoon may need to act fast to get the best market pricing.

A September report from Vanguard looked at the firm’s consumer staples ETF (VDC) on the Fed’s June decision day. At 2 p.m. ET, the bid-ask spread on the ETF widened to near the levels seen at the 9:30 a.m. market open, and stayed higher-than-normal into the close. The bid-ask spread on the underlying basket of stocks was even wider.

“This trend holds true no matter what ETF is, what asset class it is,” said Bill Coleman, Vanguard’s Head of U.S. ETF Capital Markets.

“If you have to trade on a day the Fed is announcing, trade within 10 a.m. to 2 p.m. But if you could choose, I would choose a different day,” he added.

— Jesse Pound

These are the stocks making the biggest moves midday:

• Instacart — Instacart shares fell more than 5% one day after going public on the Nasdaq.
• Steelcase — The furniture stock soared more than 26% after posting second-quarter earnings that topped Wall Street’s expectations and offered strong full-year and third-quarter earnings guidance as more companies return to work.
• Klaviyo – Klaviyo shares jumped more than 23% after the marketing automation company surged to $36.75 after its NYSE IPO.

Read the full list of stocks moving midday here.

— Samantha Subin

The Dow was the best performing index in Wednesday’s session, helped by gains in Amgen, IBM and UnitedHealth.

The three stocks all rose more than 2% in the session. By comparison, the 30-stock index gained about 0.7%.

A handful of technology names restricted gains for the blue-chip average. Intel lost more than 2%, while Apple slipped around 1%. Salesforce and Microsoft were also among names trading down.

— Alex Harring

Klaviyo shares jumped more than 23% to open at $36.75 to as the marketing automation company made its debut on the New York Stock Exchange Wednesday.

Shares, trading under the ticker symbol “KYVO,” were last up more than 17%. The stock opened roughly 23% above the $30 IPO pricing announced Tuesday, which valued shares at about $9 billion.

— Samantha Subin

The extent of how much or how broadly the economy will cool remains to be seen, said Guggenheim Partners Investment Management CIO Anne Walsh.

“Our view is that we will see a slowdown in the economy,” she said on CNBC’s “Squawk on the Street.” “Whether it’s a full-blown recession, or a type of rolling recession recession, or just a significant slowdown, that’s ahead of us.”

Walsh said the Federal Reserve has done a “tremendous” amount of economic tightening and conditions continue to be “tightened” for investors. She said investors should think more defensively in the market and pointed to opportunities in investment-grade fixed income.

— Alex Harring

Rising oil prices make dovish commentary out of the Federal Reserve unlikely on Wednesday, said Thierry Wizman, global foreign exchange at interest rate strategist at Macquarie.

“The oil price spike should make the FOMC more reluctant to signal a dovish disposition today,” Wizman said. “Traders looking for the Fed to offer some relief from the poor sentiment induced by high oil prices won’t be satisfied, especially if high oil prices are invoked in Chair Jay Powell’s presser as an excuse to sound ‘hawkish.'”

— Alex Harring

Steelcase climbed more than 26% in Wednesday’s session, a day after the furniture maker gave a better-than-expected financial report and earnings outlook.

The Michigan-based company reported 31 cents earned per share, excluding items, on $854.6 million in revenue for the second quarter. Analysts polled by FactSet expected 20 cents per share and $829.2 million.

Steelcase said to expect earnings per share for the current quarter and full year to come in higher than analysts anticipate. That helped investors overlook the company’s revenue expectations for the current quarter, which came in below analysts’ consensus estimate.

Shares have jumped more than 58% since 2023 began.

Stellantis shares rose more than 3% after the company warned that the recent United Auto Workers union strikes could result in more than 350 layoffs.

The company said it will immediately layoff 68 workers at its plant in Toledo, Ohio. Additional actions are likely at two facilities in Indiana, which could affect 300 employees.

Technology stocks restricted gains for the S&P 500 on Wednesday.

The information technology and communication services sectors lost 0.3% and 0.5%, respectively. They were the only two of the index’s 11 sectors to trade down.

As a whole, the broad index rose about 0.2%. Real estate led the nine sectors trading higher with a gain of about 1%.

Google parent Alphabet led communication services stocks lower with a loss of more than 1%, while Zebra was the worst performer of information technology names with a drop greater than 4%.

— Alex Harring

Shares of Chewy fell more than 4% after Oppenheimer moved to the sidelines.

The firm downgraded the pet retailer to perform from outperform on Wednesday.

“We expect a more challenging backdrop to persist for at least a few more quarters amid recent signs of weakness in the historically resilient pet food category and the potential for more muted inflation benefits in FY24 (Jan. 2025),” analyst Rupesh Parikh wrote in a note to clients.

The current higher-rate backdrop is also pressuring shares, he added. However, Parikh believes Chewy is positioned to gain share longer-term.

Goldman raised its 12-month ahead Brent forecast to $100 per barrel from $93. The commodity has rallied 30% since late June due to OPEC supply cuts and strong demand.  Brent touched a high of $95.96 on Tuesday, its highest level since Nov. 2022, before shedding 0.3% at $94.02 Wednesday morning.  

The firm also increased its 12-month ahead WTI price forecast to $95 a barrel from $88. WTI hit $93.74 on Tuesday, also its highest point since Nov. 2022. Prices for WTI were flat on Wednesday at $91.20 per barrel.

Analyst Daan Struyven cited modestly sharper inventory draws for the forecast increase, a trend he described as “lower for longer” supply. 

CNBC Pro subscribers can read more about the increase here.

— Hakyung Kim

RBC Capital Markets initiated coverage of IBM with an outperform rating, saying shares can jump nearly 30%. The firm also said the company’s software business is undervalued by investors.

“We feel the company’s software business is misunderstood, and undervalued, particularly its role in hybrid environments, AI and spend optimization,” read a Wednesday note.

CNBC Pro subscribers can click here for the full story.

— Sarah Min

Stocks opened up on Wednesday.

The Dow added about 0.3% shortly after 9:30 a.m. ET. Meanwhile, the S&P 500 and Nasdaq Composite each rose 0.2%.

— Alex Harring

It’s time to dump shares of Dollar General as consumers come under increasing pressure from higher costs, according to JPMorgan.

Analyst Matthew R. Boss downgraded shares to underweight from neutral, saying the company’s core low-to middle-income shopper is under strain from diminishing savings and rising inflation. The downgrade comes after JPMorgan hosted a recent fireside chat with Dollar General finance chief Kelly Dilts.

Shares fell 1.8% in premarket trading.

CNBC Pro subscribers can read more here.

— Sarah Min

These are some of the stocks moving the most in premarket trading:

• Pinterest — Shares climbed more than 3% premarket management said at the company’s first investor day that it expects year-over-year revenue growth to accelerate following a slowdown in 2022 and 2023.
• Instacart — Shares of the grocery delivery company were down nearly 4% one day after its stock market debut. The stock opened at $42 after its IPO, after pricing the offering at $30 a share late Monday.
• Bausch Health — The pharmaceuticals stock gained over 5% before the bell after Jefferies upgraded the stock to a buy rating, simultaneously raising its price target to $16.

See the full list of stocks moving here.

— Lisa Kailai Han

Apple and Goldman Sachs had worked on a feature that would have let consumers buy and sell stocks before shelving the idea as the market turned last year, sources told CNBC.

Apple feared criticism from users if people lost money in the stock market that they invested through an Apple product, the sources said. The companies then turned focus to a plan to launch savings accounts.

Representatives for both Apple and Goldman Sachs declined to comment.

— Kate Rooney, Hugh Son

Earnings could end up being a catalyst for markets beyond economic policy decisions, according to George Ball, chairman of Sanders Morris Harris.

“The markets are flailing, looking for a directional signal other than rate hikes or cuts,” Ball said. “That signal is apt to be earnings, which are going to surprise with their strength. Companies can prosper in a 5% cost of money environment. They did so in past decades and are showing they can again.”

While Ball expects rates to be left unchanged on Wednesday, he said a November hike is still on the table of inflation shows signs of acceleration. He also warned against expecting too many new insights out of Wednesday commentary from Fed officials.

“The language from the Fed in Wednesday’s statement and press conference is likely to be boringly similar to its last several pronouncements: inflation is decelerating, but not enough yet,” Ball said. “We’ve heard it before and we will hear it again.”

— Alex Harring

Treasury yields moved lower Wednesday, backing off a day after the 10-year note hit its highest level in nearly 16 years and as the Federal Reserve was about to reveal its interest latest rate decision..

The benchmark note dropped more than 2 basis points early on, dipping to 4.341%. That move lower came a day after the 10-year hit its highest level since Nov. 7, 2007. A basis point equals 0.01%, with yields moving opposite price.

Other yields also fell, with the 2-year note, which is most sensitive to Fed moves, down nearly 4 basis points to 5.071%.

— Jeff Cox

Shares of General Mills rose 1% after the food products company reported fiscal first-quarter results that were slightly above Wall Street expectations.

The company generated $1.09 in adjusted earnings per share on $4.90 billion of revenue. Analysts surveyed by LSEG were expecting $1.08 per share on $4.88 billion of revenue. Net sales were up 4% year over year, even though sales in the pet category were flat.

General Mills reiterated its outlook for the 2024 fiscal year.

— Jesse Pound

Mortgage applications to purchase a home climbed 2% last week but were still 26% lower compared to the same period last year, according to the Mortgage Bankers Association’s seasonally adjusted index.

Rates on a 30-year fixed-rate mortgage conforming balances also climbed to 7.31% from 7.27%, while demand for home refinancing ticked up 13% compared to a week earlier.

— Brian Evans

Oil prices fell Wednesday, after reaching above $92 a barrel on Tuesday.

West Texas Intermediate Crude fell 0.6% to $90.60 as of 7:22 a.m. EDT. It had hit $93.74 on Tuesday, which was its highest level since Nov. 7, 2022.

Brent Crude also lost 0.6% to hit $93.78, down from its Tuesday high of $95.96.

— Hakyung Kim

U.S. Treasury yields dipped slightly on Wednesday, though the 10-year yield is still hovering around 16-year highs, as investors awaited the latest Federal Reserve interest rate decision and guidance for policy moves ahead.

At 4:19 a.m. ET, the yield on the 10-year Treasury was down by around one basis point to 4.3567%, trading at levels last seen in 2007. The 2-year Treasury was last more than two basis points lower at 5.0859%.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

European markets opened cautiously higher on Wednesday as global investors await the latest monetary policy decision from the U.S. Federal Reserve.

The pan-European Stoxx 600 index opened 0.2% higher, with sectors spread across marginally positive and negative territory. Health-care stocks led gains with a 0.9% uptick, while oil and gas dipped 0.8%.

— Hannah Ward-Glenton

China left its one-year and five-year loan prime rates unchanged at 3.45% and 4.2% respectively for September.

The People’s Bank of China last cut the one-year LPR rates in August, lowering it to 3.45% from 3.55%, while the five-year LPR was last cut in June from 4.3% to 4.2%.

Hebe Chen, market analyst at IG International said “PBOC’s hold today highlights the dilemma that central bank keeps struggling with: to save the economy or save the yuan.”

As such, she thinks that the central bank’s “inconsistence” will persist, “due to the lack of a committed priority.”

The offshore yuan strengthened slightly to trade at 7.3028 against the greenback. The currency hit its all-time low just recently, at 7.3650 against the U.S. dollar on Sept. 8.

— Lim Hui Jie

Japan’s trade deficit fell 66.7% in August, coming in at 930.5 billion yen ($6.3 billion) compared with the 2.79 trillion yen deficit a year ago.

However, the trade deficit was still wider than the 659.1 billion yen expected by economists polled by Reuters.

Both imports and exports to the world’s third-largest economy fell 17.8% and 0.8% year-on-year respectively, lower than Reuters expectations of a 19.4% fall for imports and 1.7% drop for exports.

— Lim Hui Jie

South Korea’s producer price index rose 1% year on year in August, marking the first time the wholesale inflation rate has risen since July 2022.

This is higher than the 0.3% year-on-year gain recorded in July. On a month on month basis, the PPI gained 0.9% in August, compared with a 0.2% rise the month before.

Agricultural, forestry and marine products saw the largest rise in prices in August, with prices climbing 3.6% year-on-year and 7.3% month-on-month

The PPI measures the average change in price of goods and services sold by manufacturers and producers in the wholesale market.

— Lim Hui Jie

The Federal Reserve is widely expected to hold rates steady Wednesday, but the central bankers will give an update on their economic outlook with the summary of economic projections, which includes one key chart that traders will have an eye on.

The so-called “dot plot” that charts the projected move in the Fed funds rate and the press conference of Chair Powell will give investors a clue as to what happens in the November meeting and into 2024.

“I think that they will keep that bias towards higher rates in there and indicate that they are willing to raise the funds rate further if the data start to show that either inflation is not slowing as they expect it to, or if the labor market remains too tight,” said Gus Faucher, chief economist at PNC Financial Services Group.

Read more about the meeting here.

— Jeff Cox, Jesse Pound

Wednesday’s policy decision from the Federal Reserve will be the first since July 26, which happened early in the second-quarter earnings season.

And while the S&P 500 is down about 2.7% since that day, the earnings picture has largely held up. And that could help explain why stocks are holding up even as interest rates have started to climb again.

“The market’s resilient because of earnings. it pushes all of the other narrative and all of the other stories to the side for now,” Chris Hyzy, CIO at Merrill and Bank of America Private Bank, said Tuesday on “Closing Bell.”

— Jesse Pound

“[G]iven that inflation remains above target, the recent rise in oil prices creates a near-term headache for central banks, which they may well convey by toeing a hawkish line,” Simon MacAdam, senior global economist at Capital Economics wrote in a note to clients Tuesday entitled, “Higher oil prices not a game-changer for inflation.”

London-based Capital Economics doesn’t believe higher crude oil prices will pave the way for “a sustained rebound in inflation,” or that central banks in developed economies will react by pushing up interest rates or even keep them higher for longer solely due to the energy markets.

“[W]e do not believe that the recent increase in oil prices will cause central banks in advanced economies to respond with interest rate hikes. For oil prices to have a bearing on the outlook for monetary policy, central banks would probably need to see prices rise higher and for a sustained period against a backdrop of resilient activity and rising inflation expectations,” MacAdam said.

— Scott Schnipper

Futures were calm on Tuesday evening when trading reopened at 6 p.m. ET. Futures for the Dow, S&P 500 and Nasdaq 100 all moved by less than 0.1%.

— Jesse Pound