U.S. equities post modest weekly gains amid Fed decision, economic data

New York (US), September 26: U.S. stocks recorded modest gains for the volatile week, as investors parsed a key statement from the Federal Reserve, while digesting a slew of economic data.
For the week ending Friday, the Dow and the S&P 500 rose 0.6 percent and 0.5 percent, respectively, while the tech-heavy Nasdaq eked out a gain of less than 0.1 percent.
Equities have experienced choppy trading this week with the Dow slumping more than 600 points on Monday, followed by a 338-point rebound on Wednesday and a 506-point jump on Thursday, as investors assessed headwinds and tailwinds on the market.
The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly decline of 4.5 percent.
The Fed became spotlight on Wall Street as the U.S. central bank on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero, while signaling that the central bank may begin tapering asset purchases soon despite the Delta variant increasing economic uncertainty.
The Fed has pledged to continue its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until "substantial further progress" has been made on employment and inflation since last December.
"Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Federal Open Market Committee (FOMC), the Fed's policy-making committee, said in a statement after a two-day meeting.
"The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," the statement said.
"As expected, the Federal Reserve did not make any changes to the policy in this week's two-day policy meeting, but they did set the stage to the possibility of trimming bond purchases beginning at the November 2-3 meeting," analysts at Zacks Investment Management said Saturday in a note.
The Fed's 120 billion dollars in monthly asset purchases "has arguably kept long-term interest rates low, providing a tailwind to the strong housing market but also holding down the long end of the yield curve," according to the analysts.
"As inflation concerns spread across all facets of the global economy, the Fed appears to be positioning for the possibility of raising rates as early as next year," they said.
UBS Global Wealth Management's Chief Investment Officer Mark Haefele said that policy is expected to remain accommodative, limiting upward pressure on government bond yields, despite a more hawkish Fed meeting, adding "we recommend investors seek less conventional sources of yield while seeking winners from global growth."
On the economic front, the Department of Labor reported on Thursday that U.S. initial jobless claims, a rough way to measure layoffs, registered 351,000 in the week ending Sept. 18, following an upwardly revised level of 335,000 in the prior week. The reading topped market estimates of 320,000.
Source: Xinhua