New York: US stocks traded higher on Wednesday, as the market was buoyed by Apple’s strong quarterly earnings, and investors anticipated the US Federal Reserve to deliver its latest monetary policy, which could possibly lead to the first interest rate cut in more than a decade.
At midday, the Dow Jones Industrial Average rose 20.35 points, or 0.07 per cent, to 27,218.37. The S&P 500 rallied 3.32 points, or 0.11 per cent, to 3,016.50. The Nasdaq Composite Index increased 20.43 points, or 0.25 per cent, to 8,294.05, the Xinhua news agency reported.
Six of the 11 primary S&P 500 sectors traded higher around midday, with the energy sector up around 0.7 per cent, leading the gainers.
Shares of Apple rose over 4.1 per cent, after the US tech giant reported second-quarter earnings that beat market expectations. Its revenue guidance for the fourth quarter also came above analysts’ estimates.
The Fed is set to announce its decision on how to adjust benchmark interest rates on Wednesday afternoon. Fed Chair Jerome Powell will also hold a news conference following the announcement.
Traders have priced in a 100 per cent probability that the central bank will cut rates later, according to CME Group’s FedWatch tool around midday. If it becomes a reality, it will be the first rate cut by the Fed since the financial crisis more than 10 years ago.
More specifically, the probability to cut rate by 25 basis points stood at an overwhelming 79.1 per cent, while market participants still held a chance of 20.9 per cent for the Fed to cut rate by 50 basis points.