Stocks Edge Higher Ahead of Fed Decision
20 June 2019 - 12:53AM
Dow Jones News
By Nathan Allen and Gunjan Banerji
The Dow Jones Industrial Average edged higher as investors
awaited the conclusion of the Federal Reserve's two-day policy
meeting, as they look for clues on where interest rates are
headed.
The Dow added 50 points, or 0.2%. The S&P 500 rose 0.1%. The
Nasdaq Composite was 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.
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 0.9% 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 from President Trump. 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 investors remained cautious about trade talks.
"The upcoming meeting in Japan is unlikely to deliver a major
breakthrough for the U.S.-China trade relationship, but having the
two sides talk is better than no talk," said Steven Leung,
executive director of institutional sales at UOB Kay Hian.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
June 19, 2019 10:38 ET (14:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.