US: Stocks edge higher ahead of Federal Reserve decision

WALL Street stocks finished a choppy session modestly higher on Tuesday as markets await another interest rate hike in the Federal Reserve’s latest bid to counter inflation. Following a quarter-point increase of the benchmark lending rate in March, Federal Reserve Chair Jerome Powell and other central bankers have said a half-point increase could be announced when their two-day meeting concludes Wednesday. Analysts say the market reaction is difficult to predict, in part because of debate over the extent to which markets have already baked in the Fed shift. “There is a real uncertainty and people have different opinions about what the market is going to do after the Fed raises rates and announces quantitative tightening,” said LBBW’s Karl Haeling, pointing to a divergence between investors who predict a sell-off and those who anticipate a relief rally. The Dow Jones Industrial Average finished Tuesday up 0.2 per cent at 33,128.79. The broad-based S&P 500 climbed 0.5 per cent to 4,175.48, while the tech-rich Nasdaq Composite Index advanced 0.2 per cent to 12,563.76. Pfizer rose 2.0 per cent after reporting a surge in first-quarter profits on higher sales of its Covid-19 vaccine. The large pharmaceutical company also expressed confidence in strong demand for Paxlovid, its therapeutic for Covid-19. Biogen dipped 0.8 per cent after announcing that Michel Vounatsos would step down as chief executive in the wake of a decision by US officials overseeing the Medicare programme to sharply limit coverage of the company’s Aduhelm drug to treat Alzheimer’s disease. Expedia slumped 14 per cent despite reporting an 81 percent jump in revenues to US$2.2 billion. Analysts cited a drag from higher marketing costs and expressed disappointment that results weren’t even stronger given the strong travel market. AFP