(Reuters) – Wall Street’s main indexes were flat on Wednesday, as investors refrained from taking positions ahead of the Federal Reserve’s policy statement that is expected to open the door to future interest rate cuts.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 4, 2019. REUTERS/Brendan McDermid/File Photo
Bets of a rate cut have helped markets climb in June, with the S&P 500 index gaining 6% so far this month and about 1% away from its all-time high hit in early May.
The Fed’s statement and new economic projections are scheduled to be released at 2 p.m. ET (1800 GMT), providing investors an opportunity to gauge the impact of a prolonged U.S.-China trade conflict, President Donald Trump’s demands for a rate cut and softer-than-expected economic data on monetary policy thinking.
Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET (1830 GMT).
The U.S. central bank will likely leave rates unchanged but is likely to indicate whether it plans to cut rates later this year. The financial sector gained 0.63%, with bank stocks rising 0.76%.
“Expectations remain elevated over a rate cut in July and investors will be closely scrutinizing the statement for confirmation of a cut next month,” said Lukman Otunuga, a research analyst at ForexTime Limited in London.
“Should the Fed sound less dovish than expected or completely omit any hints about taking action next month, it could send equity markets sliding.”
Global financial markets have been fired up by European Central Bank President Mario Draghi’s Tuesday volte-face on policy easing and as investors bet on a worldwide wave of central bank stimulus.
At 9:56 a.m. ET, the Dow Jones Industrial Average was up 58.02 points, or 0.22%, at 26,523.56 and the S&P 500 was up 2.17 points, or 0.07%, at 2,919.92.
The Nasdaq Composite was down 6.74 points, or 0.08%, at 7,947.14.
The healthcare sector rose 0.4%, helped by gains in UnitedHealth Group Inc, Pfizer Inc and Allergan Plc.
Shares of Allergan gained 3.7% after the drugmaker said its constipation drug, jointly developed with Ironwood Pharmaceuticals Inc, improved symptoms of bloating, pain and discomfort in patients suffering from irritable bowel syndrome with constipation.
Adobe Inc jumped 3.7% after the Photoshop software provider beat analysts’ estimates for quarterly profit and revenue.
TripAdvisor Inc gained 1.2% after SunTrust Robinson upgraded the company’s stock to “buy.”
Declining issues outnumbered advancers for a 1.00-to-1 ratio on the NYSE and for a 1.01-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and one new low, while the Nasdaq recorded 24 new highs and 23 new lows.
Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila