U.S. stocks were largely flat at the open on Wednesday as Wall Street awaited the Federal Reserve’s decision on interest rates and as Nvidia stock slipped following reports that China had banned local companies from buying the chipmaker’s semiconductors.
Summary
- Dow Jones Industrial Average, S&P 500 and Nasdaq were largely flat on Wednesday morning.
- Wall Street’s muted open came as investor attention turned fully to the Federal Reserve and its upcoming interest rate decision.
The Dow Jones Industrial Average hovered about 40 points lower, while the S&P 500 and Nasdaq Composite fluctuated near their respective flat lines.
he subdued performance for stocks follows a slow session on Tuesday. A similar outlook played out in the cryptocurrency market, with Bitcoin (BTC) steady near $116,000 amid significant capital rotation.
Wall Street’s main focus this week has been the highly anticipated Federal Reserve policy meeting for September. In the lead-up to the Fed’s interest rate decision, expected around 2:00 p.m. ET, the market’s muted outlook reflects an effort to hold capital in reserve for a potential rally.
Stocks rose sharply when Fed Chair Jerome Powell hinted at a central bank pivot and the likelihood of a first rate cut in 2025. Despite a recent inflation spike, a weak labor market has investors pricing in a 96% chance of a 25-basis-point cut. Wall Street has also priced in a likely 50% rate cut.
As investors gauge how aggressive the Fed might be, focus will turn to the “dot plot” as well as Powell’s remarks after the meeting.
China bans Nvidia’s AI chip
Despite this week’s upbeat comments from Washington regarding U.S.-China trade relations, reports emerged concerning global AI chipmaker Nvidia.
According to the Financial Times, China has instructed top tech companies not to buy Nvidia’s AI chips.
Jensen Huang,chief executive officer of Nvidia, expressed disappointment on reports that China has instructed TikTok parent company ByteDance and ecommerce giant Alibaba not to buy Nvidia’s RTX Pro 6000D. Notably, this is an AI chip that Nvidia specifically sells in China.
The NVDA stock fell during premarket trading, shedding about 1.6% of its value.