Stan Choe, AP Business Writer
NEW YORK (AP) – U.S. stocks are drifting high Wednesday as Wall Street waits to hear where the Federal Reserve may be taking interest rates.
The S&P 500 rose 0.4% in noon trading. Dow Jones’ industrial average rose 198 points (0.5%) as of 11:30am Eastern time, with Nasdaq’s composites 0.5% higher.
Some of the most powerful moves were once again in the oil market, where crude prices were shaking in Israel’s hoping its fight against Iran would cool down. President Donald Trump on Wednesday said it would not be “too late” for Iran to reach out to him and Iran to abandon its nuclear program, but he also refused to say whether US troops would strike the country.
“I might do that. I might not do that,” he said. “I mean, no one knows what I’m trying to do.”
After exceeding $74 in the morning, the US benchmark oil barrel price fell to $71.93, down 1.8% from the previous day. International standard Brent crude plunged 1.9% per barrel to $74.96.
Oil prices have been yo-yoing for several days due to the rising and decline of fear that conflict could disrupt the crude global trends. Not only is Iran the leading producer of oil, it also sits in the narrow straits of Hormuz, which pass through many of the world’s crude paths.
The headline event for the day could arrive at 2pm in Washington, where the Federal Reserve is set to announce its latest move on interest rates. The near-unanimous expectation is that it remains stable, as it has done in all this year, after cutting the end of 2024.
More importantly, the Fed is talking about the future. Authorities will release forecasts for where the economy, inflation and interest rates are heading over the next few years. The broad expectations on Wall Street are that the Fed will cut major interest rates at least twice by the end of 2025, which has been a bit weaker recently as oil prices rose and inflation pressured upwards.
Cutting interest rates could make mortgages, credit card payments and other loans cheaper for US households and businesses and improve across the economy. However, lower rates can increase inflation more.
In addition to the threat of rising oil prices due to the battle between Israel and Iran, the Fed is concerned that Trump’s tariffs could hurt the economy and cause higher inflation. This is the main reason it is being held up at interest rates this year.
So far, inflation remains relatively tame and is approaching the Fed’s 2% target. But economists have said it may take more months to feel the full impact of tariffs.
A pair of reports on the US economy were mixed on Wednesday. Last week he said fewer workers apply for unemployment benefits, but this could indicate fewer layoffs. However, the second report said last month that the home builder had broken the ground with fewer homes than economists expected. That could be a sign that high mortgage rates are refrigerating the industry.
On Wall Street, some alternative energy stocks rose, recovering some of the sudden losses from the previous day. Enphase Energy rose 4.4%, cutting its weekly loss to 20%.
Nucor said it expects the Charlotte, North Carolina-based steelmaker to report profit growth for all three operating groups in the second quarter. It said it benefited from rising sales prices, particularly at its sheets and plate mills.
The bond market has eased Treasury yields lower than the Fed’s announcement.
The 2010 Treasury yield fell from 4.39% to 4.35% in the second half of Tuesday. The two-year Treasury yields have gone from 3.94% to 3.91%, tracking more closely the expectations of what the Fed will do with overnight interest rates.
In overseas stock markets, indexes were mixed across Europe and Asia.
Tokyo’s Nikkei 225 rose 0.9%, while Hong Kong’s Hangsen fell 1.1% in two major moves.
AP writer Jiang Junzhe contributed.
Original issue: June 18, 2025 9:48am EDT
