(Sharecast News) – US stocks edged higher on Wednesday as investors showed optimism ahead of a keenly anticipated Federal Reserve meeting, after which policymakers are widely expected to keep interest rates unchanged.
After the opening 30 minutes of trade, the Dow was up 0.4%, while the S&P 500 and Nasdaq both rose 0.3%.
The Federal Open Market Committee meeting is expected to conclude at 1400 ET, with chair Jerome Powell due to give a press conference at 1430 ET. Economists unanimously expect policymakers to leave rates at 5.25-5.50%, but remain on the fence about a potential further rate hike at the next meeting in September.
“While markets do not anticipate a rate hike, attention will be on the guidance regarding future actions, including whether rates have peaked and when they may be cut. The Fed’s updated projections, including the “dot plot” of interest rate projections, will provide insights into these questions,” said analysts at ARJ Capital.
The only major economic data release on Wednesday was weekly US mortgage applications, which jumped 5.4% in the seven days to 15 September, after a 0.8% decline the previous week. The rebound came despite mortgage rates increasing to a one-month high.
Instacart reverses after solid debut
Instacart, the grocery delivery business that debuted on the Nasdaq on Tuesday with a 12% share-price jump to $34.23, pulled back 7%, but still remains above its IPO price of $30. As of yesterday’s close, the business was valued at $11bn.
Coty was trading 6% higher after the cosmetics manufacturer delivered “outstanding FY23 results” with like-for-like revenues growing 12%. The company said the core business would grow at the top end of the forecast range this year.
General Mills slipped despite the food manufacturing beating forecasts with its fiscal first-quarter results. The company kept its full-year guidance unchanged but said the current environment is being characterised by “a resilient but increasingly cautious consumer”.
Image-sharing platform Pinterest was in demand after Citigroup upgraded the stock from ‘neutral’ to ‘buy’ and raised its target price from $31 to $36 following a recent investor event.
Walt Disney meanwhile was feeling the effects of a substantial target-price cut by Bank of America from $135 to just $110.