By Mark DeCambre, MarketWatch

All eyes on Fed Chairman Jerome Powell

U.S. stock index benchmarks mostly drifted higher Wednesday morning as investors awaited a key decision by the Federal Reserve that could determine whether Wall Street is likely to get a highly anticipated interest rate cut, or cuts, this year. Few expect such a move at this meeting.

How are benchmarks faring?

The Dow Jones Industrial Averagerose 60 points, or 0.2%, at 26,525, while the S&P 500 index climbed less than 0.1% to around 2,920, a gain of about 3 points, while the Nasdaq Composite Index fell 7 points, or 0.1%, at 7,945.

The Dow is within 1.4% of its Oct. 3 all-time closing high, while the S&P 500 index stands within 1% of its April 30 record at 2,945.83.

What's driving the market?

The Fed is discussing if and when to lower the benchmark interest rates, which stand at a range between 2.25% and 2.50%, to combat the impact of a protracted clash between the Trump administration and China over import tariffs, as well as signs of sluggish economic growth creeping into the U.S. economy.

The Wall Street Journal reported that the U.S. central bank faces unusual pressure to act both by the stock market, which is flirting with fresh highs on hope of easier monetary policy, and by the commentary from the Trump administration. Trump, who has been a constant critic of the Powell & Co., on Tuesday said "let's see what he does," in response to a question about a report indicating that the White House sought to somehow demote the Fed chairman (http://www.marketwatch.com/story/white-house-explored-legality-of-demoting-powell-from-chairman-report-says-2019-06-18) that Trump himself appointed.

Trump has repeatedly called on Powell to cut the central bank's federal-funds rate. The decision is set for 2 p.m. Eastern Time, with the Fed chairman slated to hold a news conference a half-hour later to discuss policy and policy makers projections for interest rates.

Some strategists argue that the U.S. economy hasn't weakened enough to merit a cut to borrowing costs just yet.

On Tuesday, the market was sent sharply higher after Trump said over Twitter (https://twitter.com/realDonaldTrump/status/1140977371421564928) that there will be an "extended meeting" with President Xi Jinping of China (http://www.marketwatch.com/story/trump-announces-extended-meeting-with-xi-at-the-g-20-2019-06-18) at the Group of 20 meeting in Japan.

Separately, markets also watched reports that the White House could impose sanctions on Turkey to punish the country from purchasing a missile-defense system from Russia, news that has sent the lira sliding against the U.S. dollar.

Read:'Currency war' fears rise as Trump slams Draghi's hint at more ECB stimulus (http://www.marketwatch.com/story/currency-war-fears-rise-as-trump-slams-draghis-hint-at-more-ecb-stimulus-2019-06-18)

What are strategists saying?

Traders expect confirmation of "the dovish turn observed recently while no cut is expected for this June meeting," wrote Pierre Veyret, technical analyst at ActivTrades in a daily research report.

"We reiterate; the Fed will open the window for a future rate cut with out taking action today. In fact, we think the pressure from Trump is one of the reason for the Fed to stay on hold which would likely solidify the upward trend," wrote Peter Cardillo, chief market strategist at Spartan Capital Securities in a Wednesday research note.

Which stocks are in focus?

Shares of CBS Corp. (CBS) were in focus after reports from the Wall Street Journal indicated that the media giant is preparing an offer (http://www.marketwatch.com/story/cbs-said-to-be-planning-bid-to-buy-viacom-in-the-coming-weeks-2019-06-18) to buy Viacom Inc. (VIA) Shares of Viacom were up 1%, while CBS's shares retreated 0.2%.

Harley-Davison Inc.'s stock (HOG) edged 0.3% higher after the motorbike maker said it was teaming up with a manufacturer in China to make its smallest bike in decades.

Winnebago Industries Inc.'s shares (WGO) were down 1% after the recreational vehicle maker reported a nearly 6% drop in quarterly revenue from a year earlier, missing Wall Street targets.

TripAdvisor Inc. shares (TRIP) are up 3.8% after SunTrust Robinson Humphrey analyst Naved Khan upgraded the stock to buy from hold (http://www.marketwatch.com/story/tripadvisor-stock-rises-after-suntrust-upgrades-to-buy-2019-06-19).

U.S. Steel Corp.(X) said it would cut production by idling two blast furnaces in response to falling demand for steel from a weakening manufacturing sector related to trade clashes.

La-Z-Boy Inc. (LZB), the recliner manufacturer, posted quarterly sales below analyst expectations, with the company citing tariffs as a headwind.

Barnes & Noble Inc. (BKS) reported a fiscal fourth-quarter net loss of $18.7 million, or 26 cents per share, after a loss of $21.1 million, or 29 cents per share last year. Shares edged 0.4% lower.

Shares of Southwest Airlines Co. (LUV) edged lower Wednesday, after the air carrier raised its second-quarter unit revenue guidance (http://www.marketwatch.com/story/southwest-raises-rasm-guidance-extends-expected-timeline-for-737-max-8-grounding-2019-06-19)while extending the length of time it expects its 737 Max 8 aircraft will be grounded.

How are other assets trading?

Hong Kong's Hang Seng Index rose 2.6% on Wednesday and China's Shanghai Composite Index gained 1%. Meanwhile, Japan's Nikkei 225 jumped 1.7%, while in Europe, the Stoxx Europe 600 slipped 0.2%, losing some steam a day after European Central Bank Mario Draghi said that some stimulus for the eurozone economy may be merited to combat sluggish inflation and trade-war effects.

Meanwhile, the 10-year Treasury note was at 2.08%, coming off a 21-month low, while comparable German debt , known as the bund, was trading at negative 0.29%.

West Texas Intermediate crude futures was sliding lower, while gold futures retreated after settling on Tuesday at a 14-month high, as the U.S. dollar weakened somewhat, with the ICE U.S. Dollar index falling 0.1% at 97.55.

(END) Dow Jones Newswires

June 19, 2019 10:04 ET (14:04 GMT)