LONDON, May 4 — Global stocks were little changed on Wednesday as investors kept their powder dry ahead of an expected interest rate hike by the US Federal Reserve, whose accompanying statement will help determine next moves in financial markets.
Markets expect the Fed to raise rates by half a percentage point at 1800 GMT - the most in a single day since 2000 - to curb inflation, and to detail plans to reduce its US$8.9 trillion balance sheet.“The bigger question is what will the Fed’s guidance be for rate hikes next month. Will we get another 50 basis points in June, and what’s the timeline for balance sheet reduction?” said Michael Hewson, chief markets analyst at CMC Markets.
“US markets are just about hanging on and how hawkish the Fed is likely to be is fairly key. There is a risk that the Fed could under-deliver and pull yields lower,” Hewson said.Yesterday, the Dow Jones Industrial Average closed up 0.2 per cent, the S&P 500 gained 0.48 per cent and the Nasdaq Composite .IXIC added 0.22 per cent.
Brent crude utures were up 3.6 per cent at US$108.77 a barrel. West Texas Intermediate crude CLc1 futures gained per cent to 3.7 per cent to US$106.17.
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