Investing.com – Wall Street shook off a recent two-slump in tech shares on Tuesday with the Dow hitting fresh record highs as the Federal Reserve (Fed) kicked off its two-day policy meeting.
At 11:38AM ET (15:38GMT), the Dow Jones gained 60 points, or 0.28%, the S&P 500 rose 5 points, or 0.19%, while the Nasdaq Composite bounced back 22 points, or 0.35%.
Coming off Monday’s close which saw the biggest two-day drop in the Nasdaq since December on concern about tech stock valuations, U.S. stocks appeared to put the correction behind them while waiting for the Fed decision.
With the U.S. central bank widely expected to raise interest rates by a quarter point to a range between 1.0%-1.25% on Wednesday, investors' focus will be on any fresh hints on the pace of further tightening in the months to come and next year with particular attention on any details offered to wind down its $4.5 trillion balance sheet.
Most experts believed that Wednesday’s consumer price index (CPI) data would be unlikely to stay the Fed’s hand with expectations pointing to an easing to a 2.0% annual increase in the headline number and core inflation remaining steady at 1.9%.
Retail sales will also be another piece of the economic puzzle on Wednesday which the Fed will digest before making the official announcement.
On a light calendar day Tuesday, the producer price index (PPI) for May was unchanged from the prior month, although the annual increase and the core readings all came out slightly above forecasts.
The dollar slipped lower against major rivals on Tuesday ahead of the decision with the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, down 0.15% at 97.00 by 11:40AM ET (15:40GMT).
Gold for August delivery on the Comex division of the New York Mercantile Exchange sank to one-week lows ahead of the decision. At 11:40AM ET (15:40GMT), the precious metal was last down $3.88, or around 0.3%, at $1,265.02.
Meanwhile, oil prices registered choppy trade on Tuesday but last managed to claw back gains despite the fact that OPEC’s monthly oil report showed an increase in its production for May and the cartel said that the market was rebalancing more slowly than expected.
U.S. crude futures gained 0.67% to $46.39 by 11:46AM ET (15:46GMT), while Brent oil rose 0.97% to $48.76.