By Gunjan Banerji and Nathan Allen 

The Dow Jones Industrial Average edged higher as investors awaited the conclusion of the Federal Reserve's two-day policy meeting, looking for clues on where interest rates are headed.

The Dow added 39 points, or 0.2%. The S&P 500 and Nasdaq Composite were little changed.

Federal Reserve officials finish their meeting Wednesday after debating whether to lower interest rates now or later this year. The central bank releases its policy statement at 2 p.m. Eastern time, and Fed Chairman Jerome Powell will hold a press conference shortly after. Many investors expect the Fed to slash interest rates later this year after holding them steady at this week's meeting.

The stakes are high for Wednesday's policy statement. Such expectations alongside a brightening outlook on trade have helped major U.S. stock indexes rally toward their best June in decades. The Dow, which is up 6.8% this month, is on track for its best June performance since at least 1938. The S&P 500 has rallied 6% this month and is about 1% away from its closing record.

But investors weren't in a rush to make big wagers ahead of the meeting Wednesday.

"As far as the market overall, I think it's going to be hurry up and wait until the Fed says something," said JJ Kinahan, chief market strategist at TD Ameritrade. Mr. Kinahan said he's watching for whether the Fed replaces language in its policy statement that said the central bank would be patient in making further rate changes.

Major stock indexes around the world also surged Tuesday after European Central Bank President Mario Draghi signaled the ECB could cut rates and expand its bond-buying program to shore up eurozone inflation. The Bank of England is due to publish its own rate decision Thursday, though analysts don't expect Gov. Mark Carney to echo the ECB's stance.

Also adding to investors' optimism, Mr. Trump and Chinese President Xi Jinping agreed to meet at the Group of 20 summit in Japan, sparking hopes for a trade truce and driving up U.S. indexes near their record highs.

Chinese equities led gains in Asia on Wednesday, where markets welcomed upbeat comments on trade. Hong Kong's benchmark Hang Seng Index rose 2.6%, the biggest one-day gain since November 2018. The Shanghai Composite added 1%.

Still, some analysts remained cautious about both trade talks and the outcome of the Fed meeting. The central bank has a challenging task ahead in terms of crafting a message for investors, especially after expectations of rate cuts this year have increased. Additionally, Fed days haven't been good for stocks over the past year and a half.

"The market right now is priced for perfection for today's announcement, " said James Masserio, head of Americas equity-derivatives trading at Société Générale SA. "And today's announcement can only disappoint."

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

June 19, 2019 11:52 ET (15:52 GMT)