Major US equity indices edged higher during the opening hour of trade as investors brace for a widely expected rate hike by the Federal Reserve.
A 25bps increase in the Fed fund rates is nearly priced in the market and hence, the key focus will be on the post-meeting press conference. Comments by the Fed Chair Jerome Powell will be closely scrutinized for clues over the path of future rate moves
Apart from the central bank’s near-term monetary policy outlook, Powell’s news conference would be looked upon for fresh insight over the state of the economy and the impact of trade issues, which would eventually drive sentiment surrounding perceived riskier assets – like equities.
In the accompanying monetary policy statement, the updated inflation and growth projections will also play a crucial role in driving sentiment as investors have repeatedly ignored the threat of escalating trade tensions and rather preferred to focus on strong economic data.
At the time of writing this report, the Dow Jones Industrial Average was up by around 55-points to 26,550 and the broader S&P 500 Index gained nearly 5-points to 2,920. Meanwhile, tech-heavy Nasdaq Composite Index added over 10-points and climbed to 8,020.
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