SNAPSHOT 

U.S. stocks erased gains as financials and materials stocks fell. Oil slipped after data showed an unexpected build in inventories. Treasurys extended gains, the dollar slipped and gold fell after the Fed raised interest rates.

 OPENING CALL 

Zambia will easily continue to attract exploration capital to extend the copper mining industry’s lifespan fivefold as long as Africa’s number two producer maintains current policy stability, said Nathan Chishimba head of Zambia’s chamber of mines. With more exploration capital, Zambia’s proven copper reserves can rise to one million metric tons from the current 20 million tons, and add decades to the industry lifespan. Mr. Chishimba notes that Zambia which produced 850,000 tons of copper last year will likely lift annual production to 1.5million tons within the next six years. Higher output from Zambia, which ships the bulk of its production to China would add to recovering global copper growth over the coming years, following last year’s modest contraction, says Fitch Solutions.

 EQUITIES 

U.S. stocks erased gains and closed lower, hurt by drops in financials and materials stocks after the Federal Reserve raised interest rates and signaled a continued gradual path of increases.

The late-session dip came as Treasury yields fell following Fed Chairman Jerome Powell’s press conference. Some analysts said the move in the bond market stoked worries about a flattening yield curve. That’s historically a negative indicator for longer-term growth prospects that hurts financial stocks because higher yields tend to boost lending profitability.

Wednesday’s projections showed most Fed officials expect to raise rates one more time this year and three times next year, a pace in line with expectations of many investors.

While bank stocks fell, materials shares extended their week-to-date declines. Discussions between the U.S. and its trading partners are continuing, adding to anxiety about a growth-hindering tariff fight.

After the S&P 500 and Dow industrials hit fresh records last week, some analysts have said they are re-evaluating trade risks, which could challenge markets at the same time interest rates continue to rise.

"I do feel like markets are largely shrugging them off because there’s no way to know what the actual outcome will be," said Peter Lazaroff, co-chief Investment Officer at Plancorp. "If they escalate, it would be negative for sentiment."

The S&P 500 fell 9.59 points, or 0.3%, in a fourth straight session of losses, though it remains near last week’s all-time high. The Dow Jones Industrial Average declined 106.93 points, or 0.4%, to 26385.28. The tech-heavy Nasdaq Composite closed down 17.11 points, or 0.2%, to 7990.37.

On Wednesday, Canada publicly declared that any changes to the North American Free Trade Agreement have to incorporate limits on the U.S. use of tariffs on national-security grounds. The move came after the Trump administration’s top trade negotiator threatened to move forward with a bilateral accord with Mexico amid a lack of progress with Canada on renegotiating NAFTA.

Analysts are also tracking the relationship between the U.S. and China, which canceled trade talks scheduled for this week as a monthslong tariff spat continues.

Worries about a global economic slowdown have hurt commodities this year, and the S&P 500 materials and energy sectors both dropped 1%.

 FOREX 

The U.S. dollar slipped after the Federal Reserve raised interest rates for a third time this year and removed guidance suggesting the level of rates is mean to support faster growth.

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, fell less than 0.1% to 89.11. The dollar rose 0.1% against the euro to $1.1754.

The dollar declined after forecasts showed that policy makers have penciled in four more rate increases through 2019. They also removed a section of their statement that suggested officials perceived that the current level of rates was "accommodative," meaning that it was intended to facilitate a faster pace of economic growth.

The removal of the word "is definitely consequential," though policy makers are likely to continue lifting rates at the recent pace of once per quarter in the near future, said Erik Nelson, a currency strategist at Wells Fargo Securities. The outlook further is "becoming a little less certain," he said.

 BONDS 

U.S. Treasury prices extended gains after the Federal Reserve raised short-term interest rates for the third time this year.

The yield on the benchmark 10-year U.S. Treasury note settled at 3.059%, compared with 3.102% Tuesday, notching its biggest one-day decline since August. Yields fall as bond prices rise.

Bond traders said they had already largely priced in the Fed raising short-term interest rates by a quarter percentage point, something that had helped drive Treasury yields to fresh highs over the past week. What many were closely watching for Wednesday was whether the central bank would signal a more aggressive pace of interest-rate increases for 2019 and beyond.

Yet the Fed’s median rate projections remained unchanged for 2018, 2019 and 2020. That provided some relief for investors, who said they saw the central bank still signaling a gradual course of interest-rate increases over the next few years.

"I don’t think there’s a lot of additional downside to Treasury prices given how much [yields] have already risen," said Gene Tannuzzo, senior portfolio manager for strategic income at Columbia Threadneedle Investments.

Shorter-term government bond prices rose after the Fed released its policy statement, removing the word "accommodative" in its description of rates but otherwise keeping its language unchanged. The yield on the two-year Treasury note, which tends to be sensitive to investors’ expectations for Fed policy, settled Wednesday at 2.823%, retreating from 2.843% Tuesday, its highest level in more than a decade.

Federal-funds futures, used by traders to place bets on the course of interest rates, also showed investors largely taking the Fed’s latest decision in stride. Futures on Wednesday afternoon showed investors pricing in a 32% chance of the Fed raising rates three more times through June 2019, down from 35% on Tuesday, according to CME Group. Market-implied odds for a December rate increase ticked slightly higher to 87% from 82% Tuesday.

 COMMODITIES 

Oil prices fell after a report showed U.S. inventories of crude unexpectedly increased last week due to a sharp decline in refinery activity and waning demand for fuel after an active summer.

Light, sweet crude for November delivery ended 1% lower at $71.57 a barrel on the New York Mercantile Exchange. The decline ended a three-session streak of increases in the U.S. benchmark that put Tuesday’s prices at its highest in more than two months. Brent crude, the global benchmark, declined 0.6% Wednesday, to $81.34 a barrel.

The Energy Information Administration on Wednesday reported inventories of crude oil in the U.S. rose by 1.9 million barrels to 396 million barrels in the week ended Sept. 21. That was a surprise to analysts surveyed by The Wall Street Journal who, on average, forecast a 1.3-million-barrel decline, and it cast some doubt on a recent view among investors that global supplies were quickly shrinking.

Gasoline stockpiles in the U.S. also increased, the EIA said, rising by 1.5 million barrels to 236 million barrels, which is 18 million barrels more than the same week last year. The rise in gasoline stockpiles came even as the EIA reported that the U.S. refinery capacity-utilization rate plunged by 5 full percentage points, to 90%, as refiners shut down plants for so-called turnaround maintenance during the low-demand fall season. Analysts expected activity to remain near a 95% utilization rate.

Motor gasoline supplied to the U.S. market, considered a proxy for fuel demand, fell to 9 million barrels a day last week from 9.5 million a week earlier, the EIA said.

Gold extended losses after the Federal Reserve raised interest rates and signaled it intends to keep tightening monetary policy at a steady pace next year.

Gold for December delivery was recently down 0.7% at $1,196.40 a troy ounce in aftermarket trading. Prices closed down 0.5% at $1,199.10 a troy ounce in regular trading.

In base metals, December copper was up 0.2% at $2.8280 a pound.

On the London Metal Exchange, zinc for delivery in three months was up 1.6% to $2,553.75 a metric ton, aluminum was down 0.3% at $2,065 a metric ton, tin was down 0.1% at $18,875 a metric ton, nickel was down 1% to $12,820 a metric ton and lead fell 1.2% to $1985 a metric ton.

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