NEW YORK – Wall Street’s three main stock indexes closed higher on Oct 9 as investors digested Federal Reserve meeting minutes ahead of September inflation data and earnings reports, but Alphabet shares fell on fears the US would break up Google.
Shares in market heavyweight Alphabet fell after the US Department of Justice said it may ask a judge to force Google to divest parts of its business. These include its Chrome web browser and its Android operating system, to curtail its search monopoly.
Stocks held roughly steady right after the Fed’s September meeting minutes showed a “substantial majority” of officials supported an outsized half-point rate cut. However, there was broader agreement that the move would not commit the Fed to any particular pace of cuts in the future.
Traders were last pricing in an 80 per cent chance of a 25-basis-point reduction in borrowing costs and a 19 per cent probability the Fed keeps rates on hold, according to CME’s FedWatch.
“The minutes confirmed what we’d thought all along and relieved investors. There was a debate about the 50 basis point cut, meaning that it wasn’t a sweeping consensus that we needed to do a drastic 50 basis point cut,” said Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina.
The market is awaiting the Consumer Price Index inflation report due on Oct 10 morning and the third-quarter corporate earnings season, which kicks off in earnest with some of the biggest US banks reporting on Friday.
“The minutes were also further confirmation that the Fed believes they’ve won the fight on inflation. So tomorrow’s CPI number shouldn’t be too much of a surprise,” said Bell.
Trading has been choppy this week, with investors adjusting rate-cut expectations after a surprisingly strong September jobs report suggested a US economy