US open: Slightly firmer open on the Street ahead of latest Fed policy announcement
Stocks on Wall Street kicked off the day slightly firmer on Wednesday as investors awaited the latest policy announcement from the Federal Reserve and waited for further clues on the path of rate hikes this year.
At 1540 BST, the Dow Jones Industrial Average was up 0.05% to 25,333.22, while the S&P 500 picked up 0.08% to 2,789.18 and the Nasdaq grew 0.30% 7,726.65.
Connor Campbell, a financial analyst at SpreadEx, said: "The Dow Jones ended up opening unchanged at 25320, a price it hasn't really been able to lift above in the last few sessions, likely because of the impending rate hike."
"It's going to be interesting to see how much investors react to whatever happens on Wednesday evening, given how well-signalled a rate hike has been. The response may well be down to the wording of the statement," he added.
The Fed is due to make its latest policy announcement at 1900 BST.
With market participants expecting the central bank to hike rates by 25 basis points for the second time this year, the main event will be the quarterly economic projections and the press conference with chair Jerome Powell at 1930 BST.
Oanda analyst Craig Erlam said: "The central bank has previously indicated that three rate hikes this year is likely but with the inflation picking up, the economy performing well and tax reforms having added an additional stimulus this year, a fourth could be on the cards.
"It will, therefore, be very interesting to see whether this is being factored into the economic projections yet or if policymakers still intend to take their time raising rates. There have already been suggestions that they will be willing to tolerate above-target inflation but if prices are rising faster than anticipated - CPI inflation rose 2.8% in May, core CPI 2.2% - we should get an idea of just how much they will accept."
Rabobank pointed out that the previous Summary of Economic Projections from the Fed implied that the median expectations among FOMC members was that there would be three rate hikes in total this year.
"However, only one member is required to shift their dot from the three to four camp in order for the median to move to four hikes in 2018. It would appear that the market is very much split down the middle as to whether the median will shift from three to four at this meeting," it added.
In other economic news, wholesale prices in the US rose more quickly-than-expected last month, on the back of almost across-the-board increases.
Total final demand prices rose by 0.5% versus April and by 3.1% when compared to the same month one year ago, according to the Bureau of Labor Statistics.
Economists had forecast an increase of 0.3% month-on-month and a year-on-year rise of 2.9%.
Excluding food, energy and trade, prices were only 0.1% higher month-on-month, with 'core' goods prices excluding food and energy up by 0.3%.
On the corporate front, shares of H&R Block were 18.38% lower in early trade even as the tax-prep company posted better-than-expected earnings late on Tuesday, after it said it expects margins to shrink.
AT&T lost 5.14% after a federal judge ruled on Tuesday that it can go ahead with its $85bn acquisition of Time Warner, whose shares gained 3.12%.
Elsewhere, Pivotal Software soared 23.76% after the bell following stronger-than-expected quarterly earnings on Tuesday.