Wall Street ends up on Views Fed Will hold off on Rates

US stocks rose slightly on Tuesday, nudging the Nasdaq to a record high close, as economic data bolstered views the Federal Reserve may decide against raising interest rates in the near term. The S&P financial index, which tends to rise with expectations for higher rates, slipped 0.2 percent, while the S&P utilities index, which tends to benefit from a lower rate environment, rose 1.1 percent. 

A weaker-than-expected reading on the US services sector in August added to views the Fed will refrain from raising interest rates at its meeting this month. The Fed is "not getting support from data for a rate increase, and so we're seeing the market creep a little higher today," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. 

 

Stocks should benefit from a continued environment of low rates and the Fed on the sidelines as long as economic data doesn't show significant slowing, he said. The chances of a rate hike in September dropped after the data, according to CME Group's FedWatch tool. 

 

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