U.S. stocks edge higher; Fed rate decision looms
U.S. stocks rose Wednesday after the U.S. government signaled that trade negotiations with China will begin this week, although caution before the conclusion of a Federal Reserve meeting kept gains in check, News.Az reports citing Investing.
At 05:32 ET (09:32 GMT), the Dow Jones Industrial Average rose 115 points, or 0.3%, the S&P 500 index gained 15 points, or 0.3%, and the NASDAQ Composite climbed 20 points, or 0.2%.
Sentiment has received a boost Wednesday on hopes that trade talks between the two largest economies in the world could point to an lessening of tensions globally.
U.S., Chinese officials to begin trade talks
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet their Chinese counterparts for trade talks in Switzerland this week, their respective offices announced on Tuesday evening.
The two will travel to Switzerland on May 8.
Media reports said that China’s Vice Premier He Lifeng- Beijing’s lead official for U.S.-China matters- will meet Bessent in Switzerland.
Announcement of the talks marks a potential thaw in U.S.-China relations, which drastically worsened in April as the two countries engaged in a bitter tariff exchange.
Markets feared that a prolonged trade war between the world’s biggest economies will have dire implications for the global economy. Weak data points from the U.S. and China, released over the past week, added to concerns over trade-related disruptions.
Still, news of the talks comes just hours after U.S. President Donald Trump said he was in no hurry to sign trade deals.
Fed to hold rates; outlook in focus
Still, the proximity to the Fed’s latest policy-setting meeting is limiting these gains.
The U.S. central bank is widely expected to keep interest rates unchanged later Wednesday, amid heightened uncertainty over the economy and Trump’s tariffs.
Policymakers will be grappling with relatively muddled economic data. While figures showed that U.S. gross domestic product contracted in the first quarter, consumer spending remains solid and the labor market has proved to be resilient.
But with the next batch of rate forecasts from officials not due out until June, the attention will likely be squarely on Fed Chair Jerome Powell’s post-decision press conference for any clues.
The Fed slashed rates by 1% through 2024, but has signaled a much slower pace of easing in 2025.
Disney soars on streaming growth
The quarterly earnings season has continued in full flow Wednesday.
Walt Disney (NYSE:DIS) stock rose srongly after the entertainment giant reported fiscal second-quarter earnings that beat on the top and bottom lines, boosted by better-than-expected subscriber growth for its Disney+ streaming platform as well as increased spending in its U.S. theme parks.
Uber Technologies (NYSE:UBER) stock fell after the ride-hailing service reported weaker-than-expected quarterly gross bookings and slower gains in its rideshare business, amid concerns about a slowing economy.
Advanced Micro Devices (NASDAQ:AMD) stock rose after the chipmaker unveiled upbeat second-quarter revenue guidance, driven by many clients racing to lock in purchases prior to the implementation of U.S. tariffs.
Super Micro Computer (NASDAQ:SMCI) stock fell after the data center solutions provider reported third-quarter earnings that narrowly beat estimates but fell short on revenue and lowered its full-year outlook.
Novo Nordisk (NYSE:NVO) stock surged after the drugmaker cut its sales forecasts on Wednesday for the first time since the launch of its Wegovy weight-loss drug four years ago, but it still anticipated a recovery in its biggest U.S. market.
Crude overturns earlier gains
Meanwhile, oil prices slipped lower, overturning earlier gains on the back of trade hopes and signs of healthy demand in the world’s largest consuming nation.
U.S. crude stocks fell by 4.5 million barrels in the week ended May 2, according to data from the American Petroleum Institute on Tuesday, indicating demand remains strong. Official U.S. government data from the Energy Information Administration are due later in the session.
At 09:32 ET, Brent futures dropped 0.3% to $61.99 a barrel, and U.S. West Texas Intermediate crude futures fell 0.3% to $58.93 per barrel.
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