- Treasury yields rose and stocks fell on the eve of the Federal Reserve decision, with investors betting that interest rates will remain higher for a longer period of time to prevent an inflationary spike. Brent crude briefly surpassed $95 per barrel.
- US 5-year and 10-year yields have reached their highest levels since 2007. Most major groups in the S&P 500 fell, but the index recovered from its session lows, led by gains in some megacaps such as Apple and Tesla. Instacart, an online grocery delivery service, soared in its Nasdaq debut. Walt Disney Company has backed down on plans to nearly double its theme-park spending to $60 billion over the next decade. Following higher-than-expected inflation data in Canada, the loonie rose the most among developed-market peers.
- Fed Chair Jerome Powell and his colleagues are widely expected to keep interest rates unchanged on Wednesday. Nonetheless, supply shocks such as rising oil prices pose a conundrum for the central bank because they both raise inflation and slow economic growth. Rising energy prices contributed to the US entering a recession in the mid-1970s, as well as the early 1980s and 1990s.
