By Liz Moyer
Investing.com -- Stocks closed lower after the Federal Reserve indicated interest rates might rise higher than people were expecting.
Everyone assumed the Fed would raise its benchmark rate another 0.75 percentage point when it concluded its periodic policy meeting today, but the announcement also included a set of projections that put rates on a path to rise above 4.5% next year.
Some of the policymakers signaled rates could reach 4.9%. Investors had been expecting to see a peak of 4.5% in the spring and then rates falling lower after that.
In addition, the policymakers indicate they could start cutting rates in 2024.
Stocks were weighed down by the realization that the Fed intends to keep rates higher for longer as it tries to tame inflation, and that could lead to job losses and economic pain. The projections have the unemployment rate rising from its current lows up to 4.4% by the end of next year.
Here are three things that could affect markets tomorrow:
1. Costco earnings
Warehouse club Costco Wholesale Corp (NASDAQ:COST) reports earnings on Thursday. Analysts expect to see earnings per share of $4.15 on revenue of $71.6 billion, and will be listening to what executives say about changes in consumer behavior.
2. Darden earnings
The restaurant operator Darden Restaurants Inc (NYSE:DRI) also reports earnings, with analysts expecting EPS of $1.56 on revenue of $2.47 billion. Changes in consumer behavior are also important in the restaurant business as it tries to rebound from the pandemic.
3. Jobless claims
New jobless claims data are due out at 8:30 ET (12:30 GMT). Analysts expect another low week of 218,000, which would compare with 213,000 new claims the week before.