Source: Sharecast
Markets are "still a long way below the highs made at the beginning of this week", according to David Morrison, senior market analyst at Trade Nation. "All the US majors remain oversold according to their daily MACDs, and tonight’s meeting could be significant in setting the future direction of travel."
The Dow was rising 0.6% by 1026 ET, while the S&P 500 gained 0.7% and the Nasdaq rose 0.9%.
While no change is expected from policymakers when the FOMC meeting concludes at 1400 ET, a close eye will be kept on Fed chair Jerome Powell's outlook statement amid increased economic uncertainty as Donald Trump's trade war with the rest of the world continues.
"The Fed’s latest inflation forecasts will be watched closely. The consensus seems to be that the Fed will revise down growth expectations and inflation and unemployment rate forecasts will be revised higher," said Kathleen Brooks, research director at XTB. "If inflation forecasts are revised higher, then it makes the Fed’s 2% target rate harder to achieve. If the Fed’s inflation forecasts have a 3% handle, this could be the catalyst for further volatility in financial markets."
The dollar was rebounding slightly today after hitting a five-month low on Tuesday in anticipation of the Fed meeting. The US dollar index was up 0.4% at 103.66 by mid-morning trade.
In other news, US mortgage applications pulled back 6.2% last week after 11.2% jump in the first week of March and a 20.4% surge in the last week of February, as 30-year mortgage rates rose for the first time in more than two months.
Market movers
Autodesk was rising on reports that major shareholder and activist investor Starboard is considering a proxy battle to nominate a candidate to the board.
Tesla shares were also higher following a TV interview with chief executive Elon Musk, in which he defended his reputation amid an ongoing backlash to his political leanings.
Meanwhile, Cheerios-owner General Mills fell after cutting its full-year outlook due to waning demand for snacks in the US and mounting economic uncertainty. Having previously forecast growth in the range of flat to 1%, the Minneapolis-based business now expects sales to fall between 2% and 1.5%.
