Here's How the Expected Fed Rate Hike Will Drive Up the Dow Jones Today

Garrett Baldwin

Investors watching the Dow Jones today are preparing for the final meeting of the Fed Open Market Committee of 2017. Investors anticipate that the central bank will raise interest rates.

Dow futures are up 18 points this morning as investors gauge whether Federal Reserve Chair Janet Yellen will raise interest rates despite the possibility that inflation woes will change her mind. But to find out what's really driving the Federal Reserve, click here...

Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Now here's a closer look at today's most important market events and stocks, plus Wednesday's economic calendar.

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The Five Top Stock Market Stories for Wednesday

• Today, Fed Chair Janet Yellen will hold her final press conference as leader of the U.S. central bank. The Fed is expected to raise interest rate for the third time this year, although it remains unclear just how much the central bank will add to its benchmark rate. Last night, markets projected more than an 87% probability of a 25-basis-point rate hike, according to the CME Group's FedWatch Tool. There is about a 13% probability that the hike will be 50 basis points.

• The U.S. Senate and House of Representatives have been working on a compromise to merge their two recently approved tax reform bills. The latest update suggests that the merged bill would reduce the U.S. corporate tax rate to 21%. According to CNBC, there are a few other stunning details from Republicans. Among them, the top individual tax rate would come in at 37%, homeowners would be allowed to deduct interest on mortgage loans up to $750,000, and pass-through deductions would decline to 20%.

• The price of gold was up just 0.1% in pre-market hours. Traders are being offered a very enticing opportunity to buy gold after prices recently fell to their lowest levels since July. The price of gold is down thanks to a stronger dollar, expectations for an interest rate hike later today, and migration of capital from hard assets into Bitcoin and other cryptocurrencies. But Money Morning Capital Wave Strategist Shah Gilani explains that this last factor is going to create a potential investment opportunity in gold that only comes along once in a decade. Read more of Shah's insight into why gold prices are set for a big gain in the future, right here.

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Garrett Baldwin

About the Author

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Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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