Wall St gains ahead of Fed decision; dollar firms as Turkish lira slides

NEW YORK: US stocks advanced and bitcoin rebounded on Wednesday as markets awaited the rate decision from the US Federal Reserve, which could provide insight regarding the state of the economy and the central bank’s next monetary policy moves.

Megacap tech-related momentum stocks rebounded in a risk-on revival that put the Nasdaq out front, strengthened the dollar and put gold on the defensive.

Turkey detained President Tayyip Erdogan’s main political rival in what the main opposition party called “a coup against our next president,” battering Turkish stocks and sending the lira plunging as much as 14.5 per cent against the dollar before it pared those losses.

The Federal Reserve is expected to conclude its two-day monetary policy meeting with a decision later on Wednesday to let its key interest rate stand in the 4.25 per cent to 4.50 per cent range.

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But the accompanying statement, Chair Jerome Powell’s press conference and the central bank’s Summary of Economic Projections – including the dot plot – will be parsed for clues regarding the timing of the Fed’s next rate move.

(The Fed has) dialed rate cut expectations back down to two this year,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

“With the uncertainty surrounding the new administration and some of their policies I just think it behoves them to kind of take a wait and see approach at this point.”

“I would be surprised if there was anything that deviated from that,” Keator added.

Ukrainian President Volodymyr Zelenskiy was set to speak with US President Donald Trump on Wednesday and said the United States should be in charge of monitoring any ceasefire in the Ukraine war.

“We live in such a global society there’s always going to be something happening out there in the world,” Keator said. “But long-term investors, I believe, have the ability to kind of look through some of that day-to-day noise.”

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The Dow Jones Industrial Average rose 246.54 points, or 0.60 per cent, to 41,829.45, the S&P 500 rose 36.30 points, or 0.65 per cent, to 5,650.99 and the Nasdaq Composite rose 159.22 points, or 0.90 per cent, to 17,661.27.

European stocks struggled for gains, edging back from the previous session’s robust gains ahead of the Fed decision.

Europe’s broad FTSEurofirst 300 index fell 0.38 points, or 0.02 per cent.

MSCI’s gauge of stocks across the globe rose 3.29 points, or 0.39 per cent, to 842.82.

The pan-European STOXX 600 index was flat, while Emerging market stocks fell 2.12 points, or 0.19 per cent, to 1,143.05.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.18 per cent, to 593.97, while Japan’s Nikkei fell 93.54 points, or 0.25 per cent, to 37,751.88.

The dollar rallied ahead of the central bank’s decision, but backed down from the day’s highs as markets digested the shock of Turkey’s arrest of Istanbul mayor Ekrem Imamoglu, Erdogan’s main political rival.