U.S. stocks rose on Wednesday amid weak preliminary GDP data and the Federal Reserve’s press conference regarding interest rates. The Dow Jones Industrial Average gained 198.09 points, or 1.13%, to trade at 17,779.52. The S&P 500 index rose 24.46 points, or 1.18%, to trade at 2,090.35 and the Nasdaq Composite added 65,54 points, or 1.3%, to trade at 5,095.69. The Russell 2000 index climbed 2.9% to trade at 1,178. The Federal Reserve has pointed at a possible December interest rate hike, however analysts aren’t certain whether the economy is in prime condition or not. The first test will come in the form of today’s third-quarter GDP data and jobless claims. Q3 GDP will likely come in lower according to preliminary data, most likely reporting a growth pace around half of previous quarters. Jobless claims, however, are expected to come in at their lowest rate in years. The Federal Reserve was surprisingly hawkish in its post-meeting statements, specifically calling out unemployment as a key factor in the decision to raise interest rates. The specific mention of the Federal Open Market Committee’s next meeting in December has caused many to believe that December will likely bring higher borrowing costs in tow. However, other factors moved the markets on Wednesday.
Crude oil is currently trading at $45.64 after rallying more than 6% on Wednesday after a report has shown a decrease in crude stockpiles. The U.S. Energy Information Administration (EIA) reported that 3.4 million-barrels crude have been added to inventories, below the 4.1 million-barrel hike forecast offered by the American Petroleum Institute (API) on Tuesday. The increase in energy prices has helped a number of oil-related companies.
European stocks closed higher Wednesday, lifted by oil’s rising price and the Swedish central bank’s move to expand its current bond-buying program. The central bank stated that it would raise the target of its sovereign bond buying program by 65 million Swedish krona, or around U.S. $7.63 billion, at an attempt to bolster the country’s inflation rate to a 2% target. Interest rates remained unchanged at minus 0.35%. The pan-European Stoxx Europe 600 rose 1.06% to trade at 375.82. The OMX Stockholm 30 index rose 0.85% to 1,499.64 in response to the central bank’s announcements. The French CAC 40 gained 0.9% to close the day at 4,890.58, the UK’s FTSE 100 rose 1.14% higher to trade at 6,437.8, and the German DAX 30 added 1.31% to close Wednesday’s trading session at 10,831.96.
Today’s economic data releases include German employment and U.S. GDP data, followed by Japanese inflation, employment and interest rate decisions on Friday. The last main release for the week is Eurozone unemployment late on Friday.