Stocks Narrowly Mixed Ahead of FOMC Decision

Market Overview - The S&P 500 Index is up +0.04%, the Dow Jones Industrials Index is up +0.48%, while the Nasdaq 100 Index is down -0.12% [1] - Stock indexes are mixed as they await the results of the FOMC meeting, with weakness in chipmakers impacting the broader market [2] Housing Market - US housing news was weaker than expected, with August housing starts falling -8.5% month-over-month to 1.307 million, below expectations of 1.365 million [3] - August building permits unexpectedly fell -3.7% month-over-month to a 5.25-year low of 1.312 million, weaker than the anticipated increase to 1.370 million [3] Mortgage Applications - US MBA mortgage applications rose +29.7% in the week ended September 12, with the purchase mortgage sub-index up +2.9% and the refinancing mortgage sub-index up +57.7% [4] - The average 20-year fixed rate mortgage fell -10 basis points to an 11-month low of 6.39% from 6.49% in the prior week [4] Federal Reserve Expectations - Markets expect the Fed to cut the fed funds target range by 25 basis points at the conclusion of the FOMC meeting [5][6] - The markets are pricing in a 100% chance of a -25 basis point rate cut and a 7% chance of a -50 basis point rate cut at today's FOMC meeting [7] - After the expected -25 basis point cut, markets anticipate an 86% chance of a second -25 basis point cut at the next FOMC meeting on October 28-29 [7] - Overall, markets are pricing in a total of -69 basis points in rate cuts by year-end, bringing the federal funds rate down to 3.64% from the current 4.33% [7]