Major U.S. stock indexes inched higher on Wednesday, while the dollar slipped ahead of a closely watched Federal Reserve decision. The policy board remains divided, adding tension as the meeting deadline approaches.
Investors were also focused on Oracle’s earnings report, which was set for release after Wall Street’s closing bell. These results, along with other upcoming tech earnings, may challenge the lofty valuations linked to artificial intelligence.
The Fed is widely expected to cut interest rates at 2 p.m. ET (1900 GMT). However, traders remain uncertain about what the rate path will look like in 2025. Much of the outlook depends on the Fed’s “dot plot” projections and how many policymakers anticipate one, two, or no additional cuts next year. Analysts also believe at least two of the 12 voting members could oppose easing, placing added pressure on Chair Jerome Powell.
Federal Reserve officials continue to weigh signs of a cooling labor market against persistent concerns about inflation. Recently, investors have reduced expectations for further rate cuts heading into 2026.
The situation is further complicated by the lack of fresh economic data due to the government shutdown. The November payrolls report has been postponed to December 16, while new inflation data is expected two days later. This delay reduces visibility for policymakers. As Eugene Epstein of Moneycorp noted, “The Fed is running semi-blind at this meeting because they don’t have the full picture.”
According to CME’s FedWatch Tool, markets are pricing in roughly a 90% probability of a 25-basis-point cut. Many traders expect a “hawkish cut,” meaning the Fed may lower rates but signal a slower pace of reductions.
On Wall Street, Oracle shares were down 0.8%, while the S&P 500 posted a modest gain. The Dow Jones Industrial Average rose 215.76 points, or 0.45%, to 47,776.05. The S&P 500 added 2.69 points, or 0.04%, reaching 6,843.20. Meanwhile, the Nasdaq Composite slipped 66.29 points, or 0.28%, to 23,510.20.
Seasonally, December is often a weaker month for the S&P 500. However, the final two weeks typically see a rebound known as the Santa Rally, when investors adjust portfolios ahead of year-end.
Globally, MSCI’s world equity index gained 1.18 points, or 0.12%, to 1,007.62. In Europe, the STOXX 600 edged up 0.07%.
Gold prices dipped slightly, while spot silver rose 0.6% to $61 per ounce after touching a record high of $61.61. Silver prices have more than doubled this year due to falling inventory levels and strong institutional demand. Additional interest is coming from fast-growing industries such as solar power, electric vehicles, data centers, and artificial intelligence, according to the Silver Institute.
U.S. Treasury yields slipped ahead of the Fed announcement. The 10-year Treasury yield fell to 4.161%, down 2.5 basis points from Tuesday. Global bond yields have been rising as many central banks approach the end of their own easing cycles. The Bank of Japan, meanwhile, is widely expected to raise rates at its upcoming meeting.
The dollar retreated after two days of gains as investors adjusted positions before the Fed’s decision. The dollar index fell 0.25% to 98.97. The euro gained 0.23% to $1.1652, while the dollar dropped 0.37% against the Japanese yen, reaching 156.28.
