Wall Street edges higher ahead of Fed's rate verdict
Investors will closely monitor Fed chair Jerome Powell's comments to gauge how he plans to combat the risk of rising prices, which remains a dominant concern for the central bank.
The Fed is expected to leave rates unchanged at its meeting, scheduled later in the day.
"We're still at the beginning stages of feeling that real income shock from higher tariffs in the United States, and the uncertainty effect builds up over time," said Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management.
"So I think the next couple of months of data is going to be really key about where we go from here."
Ahead of the monetary policy decision, money market moves show traders are pricing in about 46 basis points of rate cuts by the end of 2025, with a 55 per cent chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.
Following strong monthly equity trading in May, the benchmark S&P 500 index and the Nasdaq were close to record peaks before the ongoing conflict in the Middle East made investors risk averse.
The S&P 500 index stood 2.5 per cent below its record level, and the tech-heavy Nasdaq remained 3.3 per cent lower.
Investors have been anxious over the possibility of a more direct US military involvement in the Israel-Iran aerial war.
A source familiar with internal discussions said US President Donald Trump and his team were considering a number of options, which included joining Israel in strikes against Iranian nuclear sites.
In early trading on Wednesday, the Dow Jones Industrial Average rose 73.93 points, or 0.18 per cent, to 42,289.73, the S&P 500 gained 13.90 points, or 0.23 per cent, to 5,996.62 and the Nasdaq Composite gained 49.31 points, or 0.26 per cent, to 19,571.01.
Ten of the 11 major S&P 500 sub-sectors rose.
Energy and consumer discretionary stocks gained 0.6 per cent each while healthcare stocks declined 0.4 per cent.
Tesla gained 1.8 per cent.
Shares of networking and custom AI chipmaker Marvell Technology hit a three-month high and were last up 8.7 per cent.
Shares of stablecoin issuer Circle Internet rose 6.2 per cent after the US Senate passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins.
Scholar Rock rose 17.4 per cent after the drug maker said its experimental drug helped overweight patients preserve lean mass in a mid-stage trial when used in combination with Eli Lilly's weight-loss treatment.
Steelmaker Nucor rose 4.9 per cent following a second-quarter profit forecast that came above analysts' estimates.
Initial jobless claims data on Wednesday showed the number of people in the US filing new applications for unemployment benefits fell last week but stayed at levels consistent with a further loss of labour market momentum in June.
Advancing issues outnumbered decliners by a 1.63-to-1 ratio on the NYSE and by a 1.3-to-1 ratio on the Nasdaq.
The S&P 500 posted four new 52-week highs and six new lows while the Nasdaq Composite recorded 31 new highs and 53 new lows.
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S&P 500 poised for fifth record closing high
The S&P 500 reset its record high for a fifth day in a row as it surges towards the 6400-point level, in a rally that appears to be broadening at the same time valuation flags are being waved. Materials, industrials and consumer discretionary paced eight of the benchmark's 11 industry sectors higher. UnitedHealth, American Express and Goldman Sachs paced the Dow's advance.
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2 hours ago
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Israel's actions in Gaza put it at risk of becoming a global pariah
Israel's parliament — the Knesset — this week voted 71-13 in favour of annexing the occupied West Bank. It was a symbolic, non-binding vote but one which gives a window into the mindset within Israel that is feeding the humanitarian disaster the world is witnessing in Gaza. That is a disaster with no end in sight following yet another breakdown in ceasefire talks in Qatar on Thursday night, and despite the escalation in international pressure this week, first in a statement from 28 countries attacking Israel's approach to allowing aid into the strip and, early on Friday Australian time, French President Emanuel Macron's announcement that France would recognise a Palestinian state. The significance of the French president's intervention lies in the fact that he is the first of the G7 nations to commit to recognise Palestine — a step that many, including Australia, have argued until now needed to await a ceasefire and a clarification that Hamas would not have a role in its governance. Macron's move was followed by a further ramping up of pressure with British Prime Minister Keir Starmer convening an "emergency call" with France and Germany to "discuss what we can do urgently to stop the killing and get people the food they desperately need". Starmer said "the suffering and starvation unfolding in Gaza is unspeakable and indefensible". He hinted that the UK, too, may consider recognising the state of Palestine, calling statehood "the inalienable right of the Palestinian people". Anthony Albanese joined the chorus with his own statement on Friday, saying that "tens of thousands of civilians are dead, [and] children are starving" (though not going as far as to advocate recognising the state of Palestine). "Gaza is in the grip of a humanitarian catastrophe," he said. "Israel's denial of aid and the killing of civilians, including children, seeking access to water and food cannot be defended or ignored. "We call on Israel to comply immediately with its obligations under international law." But Macron's statement revealed just how immune to international pressure the Netanyahu government seems to be. The vote on annexing the West Bank — an idea originally proposed by far-right finance minister Bezalel Smotrich, who himself lives in an illegal Israeli settlement — may only have been symbolic, but clearly placed the issue formally on the agenda for the future. But this escalated rapidly in the wake of the Macron statement with deputy prime minister Yariv Levin immediately saying Israel's response must be to annex the West Bank. "It is time to apply Israeli sovereignty to Judea, Samaria, and the Jordan Valley [the biblical terms Israel uses for the West Bank]," Levin said. "This is the response of historical justice to the shameful decision of the French president." The Times of Israel reports that the Yesha Council, representing West Bank settlement municipal authorities, made the same call after Macron's announcement. "The Knesset has supported [annexation], now it's the turn of the government," the Yesha Council said. The active pursuit of the idea of annexing the West Bank does not suggest a mindset which is seriously considering a ceasefire in Gaza, let alone a two state solution. A two state solution without the West Bank hardly seems a viable proposition. Equally, the now-deliberate physical destruction of much of Gaza by Israel can only be seen to be directed at destroying its viability as a place for anyone to live. BBC Verify this week produced shocking pictures of the systematic destructions of large sections of Gaza by Israel — not just buildings damaged by earlier rocket strikes but whole neighbourhoods and villages. The parliamentary pressure from the far right on Prime Minister Benjamin Netanyahu and his precarious minority government has been intense, and one of the few positive lights is that the parliament is next week going into recess until October, reducing the threat that it can be toppled. That's not an endorsement of the government, just an observation that a sense of imminent threat from the far right when the parliament is in session must only intensify the pressure on Netanyahu to up his aggression towards the Palestinians even further. But none of that pressure can alone explain what the rest of the world sees day by day in terms of the extent of the aggression of the Israeli government's strategy, or how it is prosecuted by the Israeli Defence Forces, against civilians in Gaza, in what Albanese on Friday described as "a humanitarian catastrophe in the denial of aid and the killing of civilians, including children, seeking access to water and food" which he said "cannot be defended or ignored". The Economist observed this week that the war against Hamas had become "militarily pointless" and is "turning Israel into a pariah". "The IDF control about 70 per cent of the strip. Hamas is defeated," The Economist editorial said. "Its leaders are dead, its military capacity is a tiny fraction of what it was on October 7, 2023 and its fighters are contained in pockets making up 10-20 per cent of the territory. "Hamas's backer, Iran, is humbled. Operations by the IDF are achieving little." Yet Israel continues to imply that Hamas is the lethal force that it was even 12 months ago, and that it is Hamas, rather than Israel, that is stopping aid getting into Gaza: a proposition firmly disputed and rejected by both aid agencies and the United Nations. "A large proportion of the population of Gaza is starving," World Health Organisation chief Tedros Adhanom Ghebreyesus said this week. "I don't know what you would call it other than mass starvation. And it's man-made", he said, asserting the man-made cause of the mass starvation is the aid blockade imposed by Israel. Man-made mass starvation is considered a crime against humanity, as is the forced displacement of people. The reality of the situation on the ground in Gaza, and the spectre of children dying of malnutrition or starvation, sits at such extraordinary odds with the language of spokespeople for both the Netanyahu government and the IDF. In the face of growing international outrage about growing signs of widespread starvation in Gaza, Israeli Government spokesman David Mencer, said that "in Gaza today there is no famine caused by Israel". "There is however, a man-made shortage engineered by Hamas. Now, too often the full story is not being told. The suffering exists because Hamas has created it. The suffering exists because Hamas has made it." One of the world's most lethal military and security forces — forces that can run operations that wipe out large sections of the leadership of Hezbollah in precision operations in Iran and Lebanon — regularly tell us that their operations in Gaza are planned with equal precision, yet somehow manage to kill and maim thousands of civilians as well as aid workers, doctors and journalists. The United States and, for that matter, some Arab states that might be able to exert some influence on Israel remain deafeningly silent. The international community beyond the United States has clearly been trying to coordinate a gradual ramp up in pressure on Israel — and for that matter the Trump administration — on the basis that it needs to have further sanctions in reserve against administrations in Tel Aviv and Washington with little care for what others think. But the human crisis in Gaza has made such a cautious approach look much too weak. Analysts watching how Donald Trump has behaved in the various international crises in which he has intervened, or promised to intervene, believe he is happiest when he can make a short, sharp, effective intervention (like the stealth bombing operation in Iran) and can then claim some success. But they also believe that the US president likes to be seen to be running things. The question, therefore, is whether the push by other countries to ramp up the pressure on Israel will provoke him to act, lest he be perceived to not be directing events. 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ABC News
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Donald Trump says Hamas don't want Gaza ceasefire and its leaders will be 'hunted down'
US President Donald Trump has said Hamas do not want a ceasefire deal in Gaza and that he believes the militant group's leaders will now be "hunted down". It comes a day after Steve Witkoff, the US envoy to the Middle East, cut short indirect talks with the Palestinian militant group in Doha and amid growing international concern over the humanitarian crisis in Gaza. Meanwhile, Israel Prime Minister Benjamin Netanyahu has said that Israel and its allies will pursue "alternative options" to bring the remaining October 7 hostages home from Gaza and end Hamas rule in the territory, sparking worry that the US and Israel have abandoned ceasefire talks "It was too bad. Hamas didn't really want to make a deal. I think they want to die," Mr Trump told reporters, as he prepared to fly to the UK. "And it's very bad. And it got to be to a point where you're going to have to finish the job." Referring to Hamas's leaders, the president added: "I think they will be hunted down." The remarks appeared to leave little to no room to resume negotiations to pause the fighting, at a time when international concern is mounting over worsening hunger in war-shattered Gaza. Mr Netanyahu had said his government was still seeking a deal, despite recalling negotiators from Qatar hours after Hamas submitted its response to a truce proposal. Sources initially said on Thursday that the Israeli withdrawal was only for consultations and did not necessarily mean the talks had reached a crisis. But Mr Netanyahu's remarks suggested Israel's position had hardened overnight. Responding to Mr Witkoff blaming Hamas for the impasse, Mr Netanyahu posted on X: "Special Envoy to the Middle East Steve Witkoff got it right. "Hamas is the obstacle to a hostage release deal. Together with our US allies, we are now considering alternative options to bring our hostages home, end Hamas's terror rule, and secure lasting peace for Israel and our region." A Hamas official on Friday accused Mr Witkoff of reneging on Washington's positions and distorting reality after he announced America's withdrawal. "The negative statements of the US envoy Witkoff run completely counter to the context in which the last negotiations were held, and he is perfectly aware of this, but they come to serve the Israeli position," said Hamas political bureau member Bassem Naim, in an interview with AFP. Mr Naim also said that the talks had been constructive, and criticised Mr Witkoff's remarks as aimed at exerting pressure on Israel's behalf. The proposed ceasefire would suspend fighting for 60 days, allow more aid into Gaza, and free some of the 50 remaining hostages held by militants in return for Palestinian prisoners jailed in Israel. It has been held up by disagreement over how far Israel should withdraw its troops and the future beyond the 60 days if no permanent agreement is reached. Mr Trump also reacted to French President Emmanuel Macron announcing that France would be the first major Western power to recognise an independent Palestinian state. "He's [Macron] a very good guy, I like him, but that statement doesn't carry weight," Mr Trump said. Mr Netanyahu called the decision a "reward for terrorism". Western countries have been committed for decades to an eventual independent Palestinian state but have long said it should arise out of a negotiated peace process. Europe's two other big powers, Britain and Germany, made clear there were no plans to act on Palestinian statehood right away. The news comes amid growing concern over starvation and the lack of humanitarian aid in the Gaza Strip, as the enclave reels from 21 months of war. Gaza medical authorities said nine more Palestinians had died over the past 24 hours from malnutrition or starvation. Dozens have died in the past few weeks as hunger worsens. An Israeli official has said on Friday that aid drops would resume soon. "Humanitarian aid air drops on the Gaza Strip will resume in the upcoming days. They will be managed by the UAE and Jordan," the official told AFP. International aid organisations say mass hunger has now arrived among Gaza's 2.2 million people, with stocks running out after Israel cut off all supplies to the territory in March, then reopened it in May but with new restrictions. "The Gaza Strip does not need flying aerobatics, it needs an open humanitarian corridor and a steady daily flow of aid trucks to save what remains of the lives of besieged, starving civilians," Ismail Al-Thawabta, director of the Hamas-run Gaza government media office, told Reuters. Israel said it has let enough food into Gaza and accused the United Nations of failing to distribute it, in what the Israeli foreign ministry called on Friday "a deliberate ploy to defame Israel". The UN says it is operating as effectively as possible under Israeli restrictions. UN agencies said on Friday that supplies were running out in Gaza of specialised therapeutic food to save the lives of children suffering from severe acute malnutrition. The ceasefire talks have been accompanied by continuing Israeli offensives on the ground. Palestinian health officials said Israeli air strikes and gunfire had killed at least 21 people across the enclave on Friday, including five killed in a strike on a school sheltering displaced families in Gaza City. Israel launched its assault on Gaza after Hamas-led fighters stormed Israeli towns near the border, killing some 1,200 people and capturing 251 hostages on October 7, 2023. Since then, Israeli forces have killed nearly 60,000 people in Gaza, health officials there say, and reduced much of the enclave to ruins. Reuters/AFP
