U.S. stock indexes rose on Wednesday, as investors awaited the Federal Reserve's policy announcement and comments from Chair Jerome Powell. The Dow Jones Industrial Average (DJIA) increased by 92 points, or 0.3%, to 34,601, while the S&P 500 (SPX) and the Nasdaq Composite (COMP) also saw gains of 0.2% and 0.1% respectively.
The U.S. central bank was widely expected to keep its benchmark interest rates steady at between 5.25-5.50%. With no major economic reports scheduled for release in the US on Wednesday, investors' attention was firmly fixed on the Fed's decision and any clues about future policy directions from Powell's press conference.
Economists at Bank of America (NYSE:BAC) (BoA) projected that the median rate for 2024 submitted by policymakers would be increased by 25 basis points to 4.875%. BoA strategist Savita Subramanian also revised her year-end target for the S&P from 4,300 points to 4,600, citing potential productivity boosts in the US due to advancements in artificial intelligence, automation, and labor efficiency.
Meanwhile, shares of cosmetics manufacturer Coty (NYSE:COTY) rose by around 5% following the company's upward revision of its growth guidance for fiscal 2024 like-for-like sales from 8-10% to 10-12%. General Mills (NYSE:GIS) also saw a positive response in its share price after it reported first-quarter adjusted earnings per share of $1.09, slightly above the consensus estimate of $1.08.
In other market news, oil prices retreated from their recent 10-month highs as investors also looked ahead to the weekly U.S. inventory data. The U.S. benchmark West Texas Intermediate crude for October delivery fell 88 cents, or 1%, to $89.60 per barrel on the New York Mercantile Exchange.
The market's focus now turns to the Federal Reserve's policy announcement at 1900 BST, with traders eagerly waiting for any indications of another 25 basis point interest rate hike before 2023 concludes.
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