Stocks rise as investors await clarity on interest rates from the Fed

U.S. stocks edged between gains and losses on Wednesday as investors awaited clarity from Federal Reserve policymakers on their monetary tightening plans against a backdrop of downbeat economic data.

The S&P 500 rose 0.1% after the benchmark index fell for three straight sessions. The Dow Jones Industrial Average slipped below breakeven, while the Nasdaq Composite rose 0.3%.

Shares of Peloton ( PTON ) rose as much as 13% after the company said it had struck a deal to sell its fitness equipment and apparel business to Amazon in an effort to turn around its business and regain investor confidence .

Investors are eyeing the central bank’s annual conference in Jackson Hole, Wyoming later this week, where officials are likely to reiterate the Fed’s commitment to fighting inflation and curbing hopes for rate cuts next year.

Despite messages from Federal Reserve speakers in recent weeks confirming rate hikes will continue through the end of the year, the market is still pricing in a pivot, Baird Investment Strategy analyst Ross Mayfield told Yahoo Finance Live.

“I think all of their jaw and their aggressiveness over the last couple of weeks is starting to show,” Mayfield added. “But you still have a market that I’m not sure it believes will stick as the economy slows next year.”

At the end of the Wyoming Fed meeting, traders will tune in to remarks by Chairman Jerome Powell for clues on whether the next policy announcement on September 21 will lead to another 75 basis point rate hike or a tepid 0 ,50%.

U.S. Fed Chairman Jerome Powell and Bank of England Governor Mark Carney talk during the three-day “Challenges for Monetary Policy” conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby TPX IMAGES BY DAY

Meanwhile, shares of Nordstrom ( JWN ) fell nearly 15% after the department store giant cut its full-year sales guidance to a range of 5% to 7% on Tuesday afternoon due to weaker demand and inventory build-up. The move comes just three months after the company raised its outlook.

“Lower-income customer segments experienced significantly more attrition than higher-income segments,” CEO Erik Nordstrom said during Tuesday’s earnings call, pointing to the particular slowdown in the store’s Rack discount business.

Earnings season is over, but more gains are in store for traders, with reports from Nvidia ( NVDA ) and ( CRM ) due out on Wednesday.

In commodity markets, crude oil futures continued to gain after Saudi Arabia on Tuesday suggested that the OPEC+ alliance may make potential output cuts. WTI crude futures rose about 1.2% to hold above $94 a barrel, while Brent crude futures rose by the same margin to $101 a barrel.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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