Financial Markets                      03/19 09:46

   

   NEW YORK (AP) -- U.S. stocks are drifting higher Wednesday as Wall Street 
waits to hear what the Federal Reserve will say in the afternoon about where 
interest rates may be heading.

   The S&P 500 was up 0.3% in early trading. The Dow Jones Industrial Average 
was up 129 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq 
composite was 0.5% higher.

   The modest moves are a respite following weeks of sharp and scary swings for 
the U.S. stock market. Uncertainty is high about how much pain President Donald 
Trump will allow the economy to endure in order to remake the system as he 
wants. He's said he wants manufacturing jobs back in the United States and far 
fewer people working for the federal government.

   Trump's barrage of announcements on tariffs and other policies have created 
so much uncertainty that economists worry U.S. businesses and households may 
freeze and cut back on their spending.

   If the economy gets too weak, the Fed could cut interest rates in order to 
give it a boost, as it has in so many prior downturns. It has plenty of room to 
cut, with its main interest rate sitting at a range between 4.25% and 4.50%.

   But conditions may be more complicated for the Fed this time around. 
Lowering rates would also push inflation upward, and worries about inflation 
are already high because of tariffs. The Fed does not have a good tool to fix 
what's called "stagflation," where the economy is stagnating but inflation 
remains high.

   Virtually all of Wall Street is expecting the Fed to announce no change to 
its main interest rate this afternoon, as it waits to see how conditions play 
out. What will be more important is the set of forecasts the central bank will 
release after the meeting is over. That will show where Fed officials see 
interest rates, the economy and inflation heading in upcoming years.

   The expectation among traders is that the Fed will cut rates at least two or 
three times by the end of 2025.

   On Wall Street, Nvidia helped support the market after rising 1.1% to cut 
its loss for the year so far to 13.1%. It hosted an event Tuesday where it 
largely "did a nice job laying out the roadmap" and fighting back against 
speculation the industry is seeing a slowdown in demand for computing power, 
according to UBS analysts led by Timothy Arcuri.

   Tesla also rose 3%, following two straight losses of roughly 5%. It's still 
down 42.5% for 2025 so far.

   Big Tech has been at the center of the market's recent sell-off, as stocks 
whose momentum had earlier seemed unstoppable have since dropped sharply 
following criticism they had simply grown too expensive.

   On the losing side of Wall Street Wednesday was General Mills, which fell 
2.3%. The cereal and snack maker missed Wall Street sales targets and lowered 
its full-year outlook. The company said it expects "macroeconomic uncertainty" 
to continue to impact consumers in the current quarter.

   In stock markets abroad, Japan's Nikkei 225 slipped 0.2% after the Bank of 
Japan held steady on its own interest rates, as was widely expected. Japan also 
reported a trade surplus for February, with exports rising more than 11% as 
manufacturers rushed to beat rising tariffs imposed by Trump.

   Other indexes were mixed across Europe and Asia.

   In the bond market, the yield on the 10-year Treasury slipped to 4.29% from 
4.31% late Tuesday.

   ___

   AP Business Writers Yuri Kageyama and Matt Ott contributed.

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