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WASHINGTON (MarketWatch) – Traders who bet on rate hikes using fed funds futures contracts marked up the odds of a rate hike in December after the Fed’s policy statement was released. Traders now see a 46.3% chance of a rate hike in December, up from 41% before the policy statement was released, said John Canally, chief economic strategist at LPL Financial. Odds had briefly topped 50% before sliding back. Markets don’t fully price in a rate hike until March of 2017.

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From:: Stock Market News

Oil futures settled under $42 a barrel on Wednesday after U.S. government data showed unexpected increases in weekly supplies of both crude oil and gasoline, along with a climb in total domestic crude production. September WTI crude fell by $1, or 2.3%, to settle at $41.92 a barrel on the New York Mercantile Exchange. Shortly before prices settled, the Federal Reserve hinted that it’s open to an interest-rate increase in September and that pressured oil prices down toward the session’s lows. The settlement was the lowest for a most-active contract since April 18, according to FactSet data.

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From:: Stock Market News

Gold futures pared gains in electronic trading Wednesday, while oil futures lost more ground on the New York Mercantile Exchange after the Federal Open Market Committee left interest rates unchanged but appeared to be more open to a rate increase in September. The statement supported the U.S. dollar which, in turn, pressured dollar-denominated prices for gold and oil. Gold for December delivery was at $1,334 an ounce in electronic trading after settling higher for the session, at $1,334.50 ahead of the announcement. September oil was down $1.03, or 2.4%, at $41.89 on Nymex, ahead of its settlement on Nymex. It was trading at $42.01 shortly before the Fed news.

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From:: Stock Market News

The dollar strengthened against its main rivals Wednesday after the Federal Reserve left the door open for an interest-rate hike later this year. The dollar was up 0.9% on the day, rising to 105.79 yen after the statement, compared with 105.62 ahead of the statement. Currency traders interpreted the statement as hawkish, pushing the dollar higher. The euro turned lower on the day, falling to $1.0975, compared with $1.0999 beforehand. The pound tumbled to $1.3110, compared with $1.3137 before. The Fed voted 9-1 to leave interest rates unchanged, but policy makers appeared receptive to raising interest rates at its September meeting, saying that near-term risks to its economic outlook have diminished. In theory, higher interest rates in the U.S. would cause the dollar to climb by increasing the return on dollar-denominated assets, making them more attractive to investors.

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From:: Stock Market News

Treasury yields tumbled Wednesday after the Federal Reserve left U.S. interest rates unchanged, though central bankers appeared more open to a September increase in light of an improved economy. Yields gained across the board after the news, but later fell again to trade lower on the day, with the yield on the benchmark 10-year Treasury note down 2.6 basis points at 1.535%, its lowest level since July 13, according to Tradeweb. Yields and prices move in opposite directions and one basis point is equal to one hundredth of a percentage point. The yield on the 30-year bond was down 4.6 basis points at 2.233%, also a two-week low. And the yield on the benchmark two-year note lost 1.6 basis points to 0.750%, retreating from a one-month high reached a session earlier, as investors had priced in a more hawkish Fed rhetoric than previously expected.

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From:: Stock Market News

U.S. stocks maintained modest losses after the Federal Reserve left interest rates unchanged but central bankers appeared more open to a September increase in light of an improved economy. In the accompanying statement, the Fed said the labor market is stronger and the near-term risks from overseas have diminished. The S&P 500 index was off by 6 points, or 0.3% to 2,163. The Dow Jones Industrial Average was off by less than 0.1% at 18,462, while the Nasdaq Composite Index was up 20 points, or 0.3%, at 5,131.

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From:: Stock Market News