Investors brace for possible rate hike at uncertain Fed meeting

Investors are anticipating a possible quarter percentage point interest rate hike by the Federal Reserve during the upcoming September 16 meeting. Last month's Consumer Price Index data revealed a 0.3 percent increase in core inflation, excluding volatile food and energy prices. Higher interest rates could negatively impact stock performance by raising borrowing costs for consumers and companies, as well as increasing competition for investments from bonds and reducing equity valuations.

The S&P 500 has risen nearly 12 percent this year, but has recently pulled back and is now around 2 percent below its mid-August high. US Treasury yields are at multiyear highs, nearing a 5 percent level that could further harm stocks. Rising geopolitical tensions between the US and Iran have pushed oil prices above $100 per barrel.

Analysts suggest that if the Fed hikes rates, investors will be watching to determine if it marks the beginning of a series of rate increases or a one-time action.