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U.S. Market on the Rise: Investor Sentiment Swings as Federal Reserve Decision Looms

The stock market performance sees a positive shift amidst anticipating the Fed's monetary policy.

Federal Reserve

Market Performance Amid Anticipation of Federal Decision

The U.S. stock market exhibited a midday rebound on Tuesday, following a bearish start. This shift is largely driven by investor sentiment, teetering as they closely follow the likelihood of another rate hike by the Federal Reserve. As of 10:52 ET, indices showed a mild uptick, with Dow Jones Industrial Average gaining 0.2% (59 points) and the S&P 500 and the NASDAQ Composite elevating by 0.3%.

Fed's Upcoming Meeting: The Direction of Economic Policy

Anticipation continues to mount for the Federal Reserve's upcoming meeting next week. Given the evident cooling of the economy contrasted with a tight job market, this congregation's decision will be pivotal. The derivatives market suggests a 75% chance that the Fed might hold off on further rate increments next week. Interestingly, slightly more than half of the traders forecast a modest hike of a quarter-point in the subsequent month, July.

Pre-Meeting Events and Market Impact

Tuesday will also witness the release of the consumer price index data for May, coinciding with the onset of the Fed's two-day meeting. Notably, Fed policymakers, now in a quiet period ahead of this significant gathering, took to the speech circuit last week to advocate for a rate pause. This possibility has recently sparked an optimistic rally in the stock market, with tech stocks and NASDAQ riding the bullish wave.

Noteworthy Stock Movements

Coinbase Global Inc. (NASDAQ: COIN) witnessed a plunge as shares fell by 14%, following a lawsuit by the Securities and Exchange Commission (SEC). The crypto exchange stands accused of operating as an unregistered broker and exchange. In another notable event, Apple Inc. (NASDAQ: AAPL) saw a slight dip of 0.5% in its shares after unveiling its first major product in a decade: a high-priced mixed reality headset. Meanwhile, Thor Industries Inc. (NYSE: THO) experienced a notable surge, with shares leaping by 15%. This is credited to the recreational vehicle manufacturer posting stronger-than-expected earnings and revenue, consequently uplifting its annual guidance.