US open: Stocks rise ahead of Fed rate decision
Stocks are trading higher ahead of the US central bank's policy announcement later in the day, bolstered by a weaker than expected reading on consumer prices.
At 1708 GMT, the Dow Jones Industrial Average was 0.57% or 139.04 points higher to 24,642.33, alongside a gain of 0.17% or 4.48 points to 2,668.62 on the S&P 500 and a rise of 0.31% or 21.22 points in the Nasdaq Composite.
The rate announcement was due at 1900 GMT, with the press conference - Janet Yellen's last as Fed Chair - scheduled for 1930 GMT, with market participants expecting the Fed to hike rates for the third time in 2018, by 25 basis points.
Konstantinos Anthis at ADS Securities said: "Clearly there is scope for a more cautious tone coming out of the Fed today but the key question is whether this cautiousness finds its way into the forward guidance statement or affects the expectations for the number of rate hikes next year. If Janet Yellen and her colleagues offer a cautious outlook on the economy and acknowledge the challenges the economy is facing, the dollar could sell off today given that the rate hike decision itself is already priced in by market participants."
Earlier, the Department of Labor reported that the 'core' CPI rate advanced at a 0.1% month-on-month clip, leading to a one tenth of a percentage point slip in the year-on-year pace to 1.7% (consensus: 1.8%).
Given rising short-term interest rates and estimates that the neutral real rate of interest was now quite lower than before the financial crisis, economists were understandably a tad more cautious in the wake of Wednesday's weaker than forecast reading on CPI.
Thus, in a note sent to clients, Barclays's Blerina Uruci said: "After returning to positive prints briefly, monthly core goods prices decline again in November and the pace of increase in core services slowed.
"We think that the FOMC will maintain its caution with regards to the inflation trend in recent months and highlight that it is monitoring developments closely. Nevertheless, we think the bar is high for it to deviate from its tightening path right now and maintain our call that a 25bp interest rate increase is likely at today's meeting."
In the background, investors were also mulling news that Democrat Doug Jones won Alabama's Senate election on Tuesday night, defeating Republican Roy Moore, who was backed by Donald Trump. The victory for Jones will reduce the Republican Senate majority to 51-49 from 52-48, prompting fears that it will be harder for the Republicans to push through major overhauls such as tax reform.
In corporate news, drug-maker Eli Lilly laid-out its sales guidance for the full-year 2018, predicting revenues would be in a range between $23.0bn and $23.5bn (consensus: $23.1bn).
Shares of Amgen were also trading on the frontfoot, after it announced a 15% increase in its first quarter 2018 dividend.
To the downside, stock in biotech group Proteostasis Therapeutics was weaker in pre-market trade after announcing late on Tuesday that it plans to sell 7m shares of its common stocks.
Elsewhere, shares of ship builder Nordic American Tankers tumbled after saying it plans to sell $100m shares through a public offering.