US stock exchanges saw gains on Wednesday. Trading in New York concluded with the Dow Jones Index at 52,475 points, reflecting a 0.2 percent increase compared to the previous day’s trading. The Nasdaq 100 rose 0.6 percent to 29,813 points, while the broader S&P 500 ended the day higher, at 7,744 points, marking a 0.3 percent gain.
The Federal Reserve had left its benchmark interest rate unchanged, with the target range remaining steady at 3.75 to 4.00 percent. Thomas Gitzel, Chief Economist at VP Bank, commented that “The Fed is keeping its benchmark rate constant with a hawkish tone.” He suggested that a key factor was the fact that high fuel prices had not yet been clearly passed on to other goods. He also noted that the US midterm elections scheduled for next week might have influenced the decision, given that the Fed is considered politically neutral. Gitzel added, “A rate hike could have been interpreted as a signal against US President Donald Trump.”
Although the Fed held steady on its October meeting, the economist predicted that “a rate hike will occur in December, when the currency guardians meet next.” He explained that the Fed’s statement allowed for no other conclusion, emphasizing that economic activity is expected to expand robustly. Despite ongoing high uncertainty, including geopolitical developments, domestic spending is anticipated to prove resilient, while inflation should remain elevated.
Meanwhile, the common European currency strengthened on Wednesday evening. One Euro cost $1.1160, meaning a dollar was exchangeable for 0.8961 Euros. The price of gold also benefitted, reaching $4,073 for a fine ounce in the evening (+0.2 percent), which equates to €117.34 per gram. Conversely, oil prices climbed; a barrel of Nord Sea Brent crude cost $115.10 around 9 PM German time, representing an increase of 1.1 percent from the close of the previous trading day.
