Bay Street Likely To Open Slightly Up; Fed Policy In Focus

(RTTNews) - Slightly higher Canadian and U.S. futures, and higher silver and copper prices point to a positive start for the Canadian market on Wednesday.

However, with the Federal Reserve's policy announcement due later in the day, the mood in the market is likely to be somewhat cautious.

The U.S. central bank is expected to maintain current interest rates despite persistent inflation levels exceeding target range. New projections may show at least one more rate hike this year.

Canadian stocks tumbled on Tuesday after hotter-than-expected inflation data fueled concerns the Canadian central bank might raise interest rates.

Data from Statistics Canada showed that the consumer price index rose 4% year over year in August, following a 3.3% increase in July. Economists had expected a 3.8% increase.

The benchmark S&P/TSX Composite Index ended down 273.94 points or 1.34% at 20,218.89.

Asian stocks ended weak on Wednesday, as investors awaited the Fed's monetary policy decision, the summary of economic projections and the updated quarterly rate projections — known as the dot plot —at the conclusion of a two-day policy meeting later in the day.

European stocks are up in positive territory as investors await the Fed's summary of economic projections and the updated quarterly rate projections.

Investors are also reacting to positive inflation data from the region. Preliminary data from Destatis showed German producer prices declined at a record pace in August mainly due to the base effect caused by the very high price level of the previous year.

In the U.K., consumer price inflation slowed unexpectedly in August, rising 6.7% annually, after rising 6.8% in July, according to the Office for National Statistics. This was the weakest inflation since February 2022.

In commodities, West Texas Intermediate Crude oil futures are down $0.68 or 0.72% at $90.52 a barrel.

Gold futures are down $1.30 or 0.07% at $1,952.40 an ounce, while Silver futures are gaining $0.094 or 0.4% at $23.550 an ounce.