Stocks were mixed Wednesday morning as investors awaited a key monetary policy decision and updated economic outlook from the Federal Reserve. Treasury yields climbed, and the yield on the benchmark 10-year Treasury note jumped to more than 1.65%.
The S&P 500 fell about 0.4%, while the Dow traded just above the flat line. The Nasdaq dropped 1% as technology stocks resumed their declines amid the move higher in Treasury yields. The CBOE Volatility Index, or VIX, hovered around 20 after dropping to a pandemic-era low of 19.3 on Tuesday, or the lowest level in a year following months of virus-related anxiety in the markets.
Investors are looking ahead to the Federal Reserve’s March monetary policy decision Wednesday afternoon, along with Fed Chair Jerome Powell’s press conference later in the day. The commentary will elucidate the central bank’s assessment of the economy in recovery, and help signal to investors how soon a tweak to the current monetary policy posturing might take place. For now, the Fed has signaled it will keep monetary policy loose, with benchmark interest rates near zero and asset purchases at a clip of $120 billion per month, as the economic recovery takes place.
“Generally speaking, I think the best move is no move,” Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance on Tuesday. “Certainly we’re not going to see any immediate changes to policy, but I think markets are kind of anxious about the language that the Fed will be using to account for the fact that things have been a whole lot better than I think initially anticipated since at least their last meeting.”
