(Reuters) – The New York Stock Exchange opened mixed on Wednesday, with caution prevailing ahead of the announcement later in the day of the first rate cut by the U.S. Federal Reserve in more than four years.

In early trading, the Dow Jones index lost 16.21 points, or 0.04%, to 41,589.97 points and the broader Standard & Poor’s 500 gained 0.09% to 5,639.81 points, after setting session records on Tuesday, helped by a series of indicators suggesting a still robust US economy.

The Nasdaq Composite gained 0.18%, or 32.39 points, to 17,660.45.

Markets remain on tenterhooks ahead of the US central bank’s rate decision at 1800 GMT, and while a cut in borrowing costs is widely expected, the debate is over how much to cut, with the Fed torn between a weak labour market and fears that a disproportionate decision could spook markets.

Traders are betting on a 65% chance of a 50 basis point cut in rates, which are at their highest level in more than two decades, while bets on a more limited 25 basis point cut have fallen to 35% from 86% a week ago, according to CME Group’s FedWatch barometer.

LBP AM, which is betting on an easing of 25 basis points, believes that the Fed will have to explain very well any more aggressive decision.

“It will have to clearly indicate that this is a preventive reduction and not the new normal rate of reduction, and above all that it is not a reaction to a massive deterioration in the economic outlook,” wrote strategist Xavier Chapard in a note published Wednesday.

Investors will also be watching comments from Fed Chairman Jerome Powell later this evening to gauge the central bank’s stance on the U.S. economy and prospects for further rate cuts this year.

In stocks, General Mills, the maker of Cheerios cereal, fell 0.38% after reporting first-quarter results.

Aerospace company Intuitive Machines is up more than 62% after landing a $4.8 billion contract from NASA.

(Written by Diana Mandiá, edited by Blandine Hénault)

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