US STOCKS-Stocks rise after Fed leaves rates unchanged, cites lack of progress in inflation

Wall Street stocks wavered before trending higher on Wednesday as the U.S. Federal Reserve left its key interest rate unchanged, as expected, but indicated that the next move on rates will probably be a cut. "They left rates unchanged and the note mentions a lack of further progress on inflation," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Wall Street stocks wavered before trending higher on Wednesday as the U.S. Federal Reserve left its key interest rate unchanged, as expected, but indicated that the next move on rates will probably be a cut. The three major U.S. stock indexes were last off session lows.

The Federal Open Markets Committee (FOMC) concluded its two-day monetary policy meeting by letting the Fed funds target rate stand at 5.25%-5.50%. "They left rates unchanged and the note mentions a lack of further progress on inflation," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "That's no surprise."

The accompanying statement left the timing of any rate cut in doubt, and Fed officials underscored their concern that the first months of 2024 have done little to build the confidence they seek in falling inflation. Fed Chair Jerome Powell is expected to participate in a Q&A session shortly, which will be parsed by investors for clues on how long the central bank expects to keep its restrictive policy in place, and the timing and likelihood of any rate cuts this year.

"(Powell) is not doing to sound dovish," Cardillo added. He's going to be repeating the same thing, that the Fed is data dependent. That's not going to change." At 2:21 p.m. ET, the Dow Jones Industrial Average rose 158.35 points, or 0.42%, to 37,974.27. The S&P 500 lost 4.54 points, or 0.09%, to 5,031.15 and the Nasdaq Composite dropped 3.32 points, or 0.02%, to 15,654.51.

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