Stock market today: Wall Street drifts ahead of Fed meeting as oil prices keep

NEW YORK (AP) — Wall Street is drifting Monday, while oil prices keep rising to raise the pressure on inflation.

The S&P 500 was 0.1% higher in midday trading, coming off its second straight losing week. The Dow Jones Industrial Average was edging up by 4 points, or less than 0.1%, at 34,623, as of 11 a.m. Eastern time, and the Nasdaq composite was virtually unchanged.

Stocks have been see-sawing since early August on uncertainty about whether the Federal Reserve is finally done with its drastic hikes to interest rates. Higher rates have helped cool inflation from its peak last summer, but they also hurt prices for stocks and other investments while slowing the economy.

Traders almost universally expect the Fed to keep rates steady at its meeting this week, which ends Wednesday. More attention will be on the forecasts Fed officials will publish about where they expect interest rates, the economy and the job market to head in upcoming years.

One of the first the market will fixate on is how high officials at the Fed see its main interest rate rising this year. Traders are betting on a roughly 40% chance the Fed will raise rates again in either November or December, according to data from CME Group.

But just as much attention will be on what Fed officials say about next year, when investors expect the Fed to begin cutting interest rates. Investors crave such cuts, which typically loosen up financial conditions and give boosts to financial markets. The big question is by how much the Fed could cut.

Economists at Goldman Sachs expect Fed officials to indicate a full percentage point of cuts next year, after raising rates one more time this year to a range of 5.50% to 5.75%.

Fears are strong that rates may have to stay higher for longer in order to get inflation fully down to the Fed’s 2% target. While underlying trends on inflation continue to improve mostly, a recent upswell in oil prices has complicated things.

A barrel of U.S. crude rose another 1% Monday to $90.96. That’s up from less than $70 in July. Brent crude, the international standard, added 0.9% to $94.74 per barrel.

Higher prices for gasoline and other fuel were a big reason that inflation consumers are feeling accelerated last month to 3.7% from 3.2%.

The rise in fuel prices, along with worries about rates staying higher for longer, have helped push up Treasury yields across the bond market.

The 10-year Treasury yield was holding steady at 4.33%, where it was late Friday. But it’s been mostly climbing since sitting around 3.40% in May.

The two-year Treasury yield, which more closely follows expectations for the Fed, rose to 5.05% from 5.04% late Friday.

Worries about a possible recession also continue to hang around, even though they’ve diminished with successive reports showing the economy and job market continue to hum.

One worrying factor is where bond yields are, with two-year and other shorter-term yields continuing to remain higher than longer-term yields. That’s an unusual occurrence that has often preceded recessions in the past.

Another warning signal comes from the leading economic indicators index, which…