Stocks closed lower Tuesday as uncertainty around the Federal Reserve's future policy plans kept market participants on edge.
Rising oil prices did little to lift investor sentiment, either, with worries percolating about higher energy costs keeping inflation – and interest rates – higher for longer.
The Federal Reserve kicked off its two-day policy meeting today, with a decision and press conference from Fed Chair Jerome Powell slated for tomorrow afternoon. It's all but guaranteed that the central bank will keep interest rates unchanged this time around. The uncertainty, however, surrounds what it will do next.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The futures market projects that this would be the last hike of the cycle followed by a series of cuts beginning next spring," says John Lynch, chief investment officer for Comerica Wealth Management. "We are not convinced that will be the case and suspect the Fed is prepared to keep rates elevated beyond the consensus forecast horizon to combat energy prices and persistent core inflation."
Indeed, oil spent most of Tuesday in positive territory, though U.S. crude futures eventually settled down 0.3% at $91.20 per barrel. Still, oil prices are up more than 34% since their mid-June low near $68 per barrel, and based on last week's Consumer Price Index (CPI) data, the rising prices are throwing a wrench in the disinflationary trends we saw earlier this year.
Instacart stock pops in trading debut
Meanwhile, Instacart's initial public offering (IPO) received resounding applause from the equity market. Maplebear (CART), the tech company that does business as online grocery delivery firm Instacart, last night priced its offering at $30 per share – the high end of its range – and opened today at $42. CART stock hit an intraday high of $42.95 before settling at $33.70.
However, David Trainer, CEO of New Constructs, a research firm powered by artificial intelligence, thinks investors should pass on the Instacart IPO. "It's true, Instacart has built a profitable business, but growth is slowing, competition is rising, and demand for this service remains shaky as people return to in-person shopping as the pandemic fades," Trainer says.
Instacart's successful start mirrors last week's blockbuster IPO from chipmaker Arm Holdings (ARM, -4.9%). Though ARM stock has pulled back in recent sessions, it is still holding above its IPO price of $51 per share, closing today at $55.17.
The red-hot IPO train continues tomorrow, with marketing automation platform Klaviyo set to start trading on the New York Stock Exchange under the ticker "KVYO."
As for the major indexes, the Nasdaq Composite fell 0.2% to 13,678, the S&P 500 gave back 0.2% to 4,444, and the Dow Jones Industrial Average shed 0.3% to 34,518.
Related content
-
Quiz: How Well Do You Understand the Social Security Earnings Test?Quiz Test your basic knowledge of the Social Security earnings test in our quick quiz.
-
The 'Go Live Your Life' Rule of Retirement SpendingThe 'guardrails approach' to retirement spending signals when you can spend more and when you need to rein it in, giving you greater flexibility in your post-work life.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffet become people like Warren Buffet by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for Fall Rate Cuts by the FedThe probability the Fed cuts interest rates by 25 basis points in October is now greater than 90%.
