US markets open higher as investors await Fed decisions

Central bank expected to announce timing of tapering

Ovunc Kutlu   | 22.09.2021
US markets open higher as investors await Fed decisions


US stocks opened higher Wednesday as they struggled to recover from losses in previous days with investors awaiting key decisions after the Federal Reserve meeting at 2 p.m. EDT.

The two hot topics that worry investors are whether the central bank may signal an early rate hike in late 2022, instead of at least two hikes in 2023.

And the timing of the bank's tapering -- the process to reduce accumulating $120 billion of new assets on its balance sheet every month -- is expected to be announced to start next month, instead of early 2022.

Major risks, since last week, have surrounded China's second-largest property developer, Evergrande Groups, which has $300 billion in liabilities, that could default on its debt, which would cause millions of customers to lose deposits.

Evergrande said it will make a payment due Thursday on a 4 billion yuan ($620 million) bond that has a 5.8% interest rate, adding that details were "settled in negotiations outside the market."

The Dow Jones rose 198 points, or 0.6%, to 34,118 at 9.37 a.m. EDT. The blue-chip index finished the previous session in negative territory after falling 1.8% Monday to mark its biggest single-day loss since July 19.

The S&P 500 increased 19 points, or 0.44%, to 4,373, as it also posted a decline Tuesday after plummeting 1.7% in the day before -- its worst one-day performance since May 12.

The Nasdaq added 37 points, or 0.25%, to 14,785. The tech-heavy index gained 0.22% the previous session after plummeting 2.19% on Monday.

There was some pullback on the VIX volatility index, which was down 5.2% to 23.10; but, the fear index as it is known, is still above the critical level of 20.

While the yield on 10-year US Treasury notes gained 0.15% to 1.326%, the dollar index was slightly up 0.05% to 93.25.

Precious metals were on the rise as well with gold rising 0.14% to $1,777 per ounce and silver gaining 1.6% to $22.85.

Oil prices increased around 1.7% with Brent crude trading at $75.66 per barrel and the US benchmark West Texas Intermediate was at $71.69.

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