Stock market today: Wall Street rises after Federal Reserve holds steady on interest rates

Nov 1, 2023, 12:25 AM | Updated: 11:44 am

NEW YORK (AP) — U.S. stocks are rising Wednesday after the Federal Reserve opted against pressing the brakes even harder on Wall Streeet and the economy, at least for now.

The S&P 500 was up 0.8% in afternoon trading, coming off its third straight losing month largely because of higher yields in the bond market. The Dow Jones Industrial Average was up 156 points, or 0.5%, as of 2:15 p.m. Eastern time, and the Nasdaq composite was 1.1% higher.

Indexes added to their gains after the Fed announced its decision to hold interest rates steady, which was what investors expected. It’s already yanked the overnight rate from nearly zero early last year to its highest level since 2001, above 5.25%. The big question is how long the Fed will keep the rate high before cutting it to provide financial markets more oxygen.

Longer-term Treasury yields have been rising rapidly since the spring and catching up with the Fed’s overnight rate. They’ve rallied as the U.S. economy has remained remarkably resilient and the central bank has warned it may keep its short-term rate high for a long time.

The yield on the 10-year Treasury dropped to 4.80% from 4.92% late Tuesday. Last month, it topped 5% to reach its highest level since 2007, up from less than 3.50% during the spring.

High yields knock down prices for stocks and other investments while making borrowing more expensive for nearly everyone. That slows the economy and puts pressure on the entire financial system.

Yields fell Wednesday after the Fed’s statement may have given a nod to the notion that higher bond yields and shakiness in financial markets may be slowing the economy on their own without any more hikes needed.

The Fed’s statement said that “tighter financial and credit conditions” are likely to weigh on the economy and inflation. After previous rate decisions, it had cited only tighter credit conditions. Some investors are hopeful the Fed may not feel the need to hike rates anymore now that the 10-year yield has climbed as high as it has.

Earlier in the day, reports on the economy gave a clouded view. Strong reports on the economy recently have raised worries about upward pressure on inflation, even if they’re also keeping a lon g-predicted recession at bay. The Fed has been saying it plans to keep rates high because it wants to ensure high inflation is on its way back down to its 2% target.

One report from ADP suggested hiring accelerated last month by employers outside the government, though not by as much as economists expected. A more comprehensive jobs report from the U.S. government will arrive on Friday.

A separate report said U.S. employers were advertising slightly more job openings at the end of September than economists expected. The Fed has been hoping for softening there, which could take pressure off inflation without requiring many layoffs across the economy.

A third report, meanwhile, said U.S. manufacturing contracted by more last month than economists had forecast. Manufacturing has been one of the U.S. economy’s hardest-hit areas.

In the background, big U.S. companies continue to report stronger profits for the summer than analysts expected, though that hasn’t been enough in recent weeks to offset worries about higher yields.

DuPont fell 7.5% despite reporting stronger profit for the latest quarter than analysts had forecast. The chemical company gave some financial forecasts for the full year of 2023 that fell short of analysts’ expectations as it sees weakness in China and other challenges.

Estee Lauder also pointed to slower growth in China, among other factors, when it cut some of its financial forecasts for its fiscal year. The company also reported weaker revenue for the latest quarter than expected, and its stock tumbled 18%.

On the winning side of Wall Street, chipmaker Advanced Micro Devices rose 7.8% after it reported stronger profit and revenue for the latest quarter than forecast. Its revenue forecast for the end of 2023 disappointed some analysts, but it also pointed to growth in 2024 coming from the artificial-intelligence boom.

An AI-fueled bonanza earlier this year helped fuel big gains for some Big Tech stocks, with expectations high that the technology could usher in mammoth profits.

In the oil market, prices continue to swing on uncertainty about whether the latest Israel-Hamas war will affect the production and movement of crude. A barrel of benchmark U.S. oil fell 0.5% to $80.59, while Brent crude gained 0.6% to $85.49.

Oil prices recently dropped back below where they were before the Oct. 7 attack on Israel by Hamas. The region is not home to major oil production, but the fear is that the conflict could draw in Iran or other big oil-producing nations.

A barrel of U.S. oil had jumped from less than $70 in the summer to more than $93 shortly before the war.

In stock markets abroad, indexes were mostly higher across Europe and Asia.


AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

United States News

China’s President Hu Jintao, shakes meets with singer-songwriter, Barbra Streisand, left, and...

Associated Press

Henry Kissinger, secretary of state under Presidents Nixon and Ford, dies at 100

WASHINGTON (AP) — Former Secretary of State Henry Kissinger, the diplomat with the thick glasses and gravelly voice who dominated foreign policy as the United States extricated itself from Vietnam and broke down barriers with China, died Wednesday, his consulting firm said. He was 100. With his gruff yet commanding presence and behind-the-scenes manipulation of […]

6 hours ago

File - A truck passes oil pump jacks at dusk near Karnes City, Texas, Wednesday, Nov. 1, 2023. On W...

Associated Press

US economic growth for last quarter is revised up to a 5.2% annual rate

Shrugging off higher interest rates, America's consumers spent enough to help drive the economy to a brisk 5.2% annual pace from July through September.

6 hours ago

Associated Press

A US Navy plane went into a Hawaii bay. Underwater video shows its tires are touching a coral reef

KANEOHE BAY, Hawaii (AP) — Tires from a large airplane that’s been stuck in a Hawaii bay for more than a week are resting on parts of a reef, according to video the U.S. Navy released Wednesday as it figures out a plan to remove the aircraft. There were no injuries to the nine people […]

6 hours ago

FILE - Utah Food Bank volunteers load groceries for the needy at a mobile food pantry distribution ...

Associated Press

Total GivingTuesday donations were flat this year, but 10% fewer people participated in the day

NEW YORK (AP) — Nonprofit organization GivingTuesday estimates that donors gave $3.1 billion this year on what has become one of the most important fundraising days of the year — the Tuesday after Thanksgiving. Donations were up $20 million on Tuesday, a 0.6% increase over last year before adjusting for inflation, the nonprofit said. GivingTuesday […]

7 hours ago

(Photo by South Korean Defense Ministry via Getty Images)...

Associated Press

US Navy warship shoots down drone launched by Houthis from Yemen, official says

A U.S. Navy warship sailing near the Bab el-Mandeb Strait shot down a drone launched from Yemen, a U.S. official said Wednesday.

7 hours ago

Associated Press

Maui officials on standby to stop heavy rains from sending ash into storm drains

LAHAINA, Hawaii (AP) — Maui officials were on standby Wednesday to prevent ash from August’s deadly wildfire in Lahaina from flowing into storm drains after forecasters said a winter storm could bring heavy rain and strong winds to the island. The National Weather Service said rain falling at a rate of more than 1 inch […]

7 hours ago

Sponsored Articles

Follow @KTAR923...

The 2023 Diamondbacks are a good example to count on the underdog

The Arizona Diamondbacks made the World Series as a surprise. That they made the playoffs at all, got past the Milwaukee Brewers in the NL Wild Card round, swept the Los Angeles Dodgers in the NLDS and won two road games in Philadelphia to close out a full seven-game NLCS went against every expectation. Now, […]


Midwestern University

Midwestern University: innovating Arizona health care education

Midwestern University’s Glendale Campus near Loop 101 and 59th Avenue is an established leader in health care education and one of Arizona’s largest and most valuable health care resources.



Importance of AC maintenance after Arizona’s excruciating heat wave

An air conditioning unit in Phoenix is vital to living a comfortable life inside, away from triple-digit heat.

Stock market today: Wall Street rises after Federal Reserve holds steady on interest rates