US open: Stocks mixed as investors await outcome of Fed meeting

Wall Street trading got off to a mixed start on Wednesday as investors held out for the outcome of the Federal Reserve's two-day policy meeting later in the day.

As of 1530 GMT, the Dow Jones Industrial Average was up 0.15% at 32,875.15, while the S&P 500 was 0.46% lower at 3,944.61 and the Nasdaq Composite came out the gate 1.03% weaker at 13,332.61.

The Dow opened 49.20 points lower on Wednesday after both it and S&P 500 retreated from fresh record highs on Tuesday.

Wednesday's primary focus will be the central bank's new economic and interest rate forecasts, which will potentially indicate if Fed heads intend to raise rates before 2023.

Market participants will also hold out for comments from Federal Reserve chair Jerome Powell, who will likely move both stock and bond markets with whatever he says, despite the fact that it is highly unlikely he will offer up any specifics.

Also in focus, the yield on the 10-year Treasury note rose to a 13-month high after the opening bell on Wednesday, climbing five basis points to land above 1.67%, its highest level since February 2020, while the 30-year rate jumped to 2.42%, its highest level since November 2019.

CMC Markets' David Madden said: "No change is expected from the US central bank but the commentary in relation to bond yields and concerns about rising inflation will be the centre of attention.

"Recent rallies in the yield have put pressure on stocks so if further gains are made from here, equities might endure some pain. Jerome Powell, the head of the Fed, is in a difficult spot as he doesn’t want to hike rates anytime soon but at the same time, he can’t ignore the rise in yields and the increasing chatter that higher inflation is in the pipeline. Mr Powell will probably make it clear that the Fed won't be pushed around by the bond market and that it will stay the course with respect to its policy as its economic aims are far from being achieved."

On the macro front, the total number of mortgage applications in the US fell 2.2% in the week ended 12 March, following a 1.3% drop in the prior week for the fifth decline in six weeks, according to the Mortgage Bankers Association. Applications to refinance a home loan slipped 4.2% on a weekly basis and were 39% lower than a year ago, while applications to purchase a home rose 1.8% week-on-week and were up 5% year-on-year.

Elsewhere, housing starts in the US fell 10.3% on a monthly basis in February, following January's 5.1% decline, according to the Census Bureau and the Department of Housing and Urban Development, while building permits dropped 10.8% in the same period, erasing/ all of January's increase.

In the corporate space, company's whose fate is strongly tied to an economic reopening, like Boeing, Royal Caribbean and Carnival, were in the green early as the US' vaccine rollout and the easing of state lockdown measures also boosted stocks.