New York Stocks Mixed Near Flat Ahead of FOMC Rate Decision

Policy Rate Decision at 2 p.m.: 0.25 Percentage Point Cut Likely
Intense Debate Expected Among Committee Members Over Size of Rate Cut
Focus on Dot Plot for Future Rate Path and Powell’s Remarks

On September 17 (local time), the three major indices on the New York Stock Exchange showed mixed movements, remaining near flat. Ahead of the Federal Open Market Committee (FOMC) policy rate decision scheduled for later in the afternoon, investors are refraining from making bets and maintaining a cautious stance.

As of 9:31 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was up 175.97 points (0.38%) from the previous trading day, standing at 45,933.87. The S&P 500 Index, which focuses on large-cap stocks, rose 3.12 points (0.05%) to 6,609.88, while the tech-heavy Nasdaq Index fell 13.238 points (0.06%) to 22,320.721.

By stock, Nvidia was down 1.33%. The decline followed news that the Chinese government had banned domestic companies from purchasing Nvidia chips. Oracle, seen as a leading candidate to acquire TikTok's U.S. operations, was up 0.13%. Apple rose 0.38%, and Microsoft was up 0.12%. Tesla was showing a decline of 1.89%.

The market's main focus is the outcome of the FOMC meeting, which will be announced at 2 p.m. The U.S. Federal Reserve is expected to cut the current policy rate of 4.25-4.5% by 0.25 percentage points, and attention is centered on the dot plot outlining future rate projections and the remarks by Federal Reserve Chair Jerome Powell at the press conference. In particular, with stock prices already near record highs, there is a sense of caution that the Fed may adopt a less dovish (less accommodative) stance.

This meeting is also expected to feature intense debate among committee members regarding the extent of the rate cut. Steve Myron, the White House National Economic Council Director known as President Donald Trump’s “economic advisor,” is participating as a new board member for the first time. Considering that President Trump has continuously pressured the Fed to lower rates, there is a possibility that Director Myron, along with Vice Chair Michelle Bowman and Governor Christopher Waller-both considered candidates for the next Fed Chair-may advocate for a “big cut” (a 0.5 percentage point rate cut). In fact, Vice Chair Bowman and Governor Waller argued for a 0.25 percentage point cut at the July meeting and cast dissenting votes against the majority decision to hold rates steady.

Jim Reid, a strategist at Deutsche Bank, explained, “There could be significant differences of opinion among the committee members, and several could express dissenting views. At the last meeting, for the first time since 1993, two members dissented, and this time, Director Myron, newly appointed by President Trump, has joined the board.”

There has been little change in Treasury yields. The yield on the 10-year U.S. Treasury, the global benchmark for bond yields, was at 4.02%, while the yield on the 2-year Treasury, which is sensitive to monetary policy, was at 3.51%, both remaining at the previous day's levels.