Wall Street edged higher ahead of Fed's interest 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% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.
Wall St climbs as oil prices ease, Fed meeting in focus
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% below its record level, and the tech-heavy Nasdaq remained 3.3% lower.
Investors have been anxious over the possibility of a more direct U.S. military involvement in the Israel-Iran aerial war.
A source familiar with internal discussions said U.S. President Donald Trump and his team were considering a number of options, which included joining Israel in strikes against Iranian nuclear sites.
At 09:52 a.m. ET, the Dow Jones Industrial Average rose 73.93 points, or 0.18%, to 42,289.73, the S&P 500 gained 13.90 points, or 0.23%, to 5,996.62 and the Nasdaq Composite gained 49.31 points, or 0.26%, to 19,571.01.
Ten of the 11 major S&P 500 sub-sectors rose. Energy and consumer discretionary stocks gained 0.6% each, while healthcare stocks declined 0.4%.
Tesla gained 1.8%.
Shares of networking and custom AI chipmaker Marvell Technology hit a three-month high and were last up 8.7%.
Shares of stablecoin issuer Circle Internet rose 6.2% after the U.S. Senate passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins.
Scholar Rock rose 17.4% after the drugmaker 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% following a second-quarter profit forecast that came above analysts' estimates.
Initial jobless claims data on Wednesday showed the number of Americans filing new applications for unemployment benefits fell last week, but stayed at levels consistent with a further loss of labor 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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Following a recent visit to the Federal Reserve to inspect a renovation project, the tension between US President Donald Trump and Fed Chairman Jerome Powell was apparent. The future of Powell's position remains uncertain, as both appeared tense during their media presentation. When questioned about the Federal Reserve's renovation exceeding its budget, Trump remarked he would dismiss an employee over it but saw no need to fire the Fed Chairman. Despite a friction between them, the US dollar strengthened, buoyed by the market's confidence following Trump's assurance that Powell would not be let go. Meanwhile, June's durable goods data was disappointing due to weak orders for transportation equipment; it still exceeded expectations, contributing to Dollar's recovery. This weakness primarily stems from tariff pressures rather than other factors. 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SBP meeting today Last week, there was a notable change in the Pakistani foreign exchange market, a rarity in recent times, as the Rupee strengthened against the US Dollar. On Monday, it was around 285 to 1 USD, but by Friday, the SBP closed at 283.4539. It is said that administrative measures helped PKR to gain some strength. The future trend continues to be uncertain. Analyzing the data, it appears that Pakistan's economy is on an upswing. This can be supported by various metrics, for instance, the country's debt and deficit ratios indicate a stronger economic position compared to some emerging and advanced economies. The region's challenges, however, play a significant role. For comparative purposes, consider certain European nations that may hold their credit ratings despite underlying risks. Pakistan's geographical context and lack of diversity similar to weaker European economies further differentiate its situation. 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However, this alone may not be enough unless the tax-to-GDP ratio needs to be raised significantly. Despite these encouraging signs and with oil prices around $ 70 per barrel, the Pakistani Rupee should not have depreciated and should have remained stable. A stable PKR will assist the administration and monetary authorities in keeping inflation low, enabling the monetary policy committee to potentially lower the policy rate in alignment with inflation trends. Given these considerations, policymakers on Monday July 28, might think about reducing the interest rates by nearly 100 basis points. Copyright Business Recorder, 2025
