Wall Street edges higher ahead of the first Fed decision under Kevin Warsh

Major Wall Street indexes posted modest gains in choppy trading on Wednesday, as semiconductor stocks rebounded while investors awaited the first monetary policy decision from the Federal Reserve under new Chair Kevin Warsh.

Shares of several high-valuation chipmakers advanced, including Broadcom, Micron Technology, Advanced Micro Devices (AMD), and Intel, with gains ranging from 2.5% to 4%.

The S&P 500 technology sector rose 1.2%, while the Philadelphia Semiconductor Index jumped 3.5%.

Focus turns to the Fed decision and Warsh’s first press conference

Investor attention is firmly centered on the Federal Reserve’s policy announcement, scheduled for 2:00 p.m. Eastern Time.

Markets widely expect the Fed to leave interest rates unchanged within the 3.50%–3.75% range, as policymakers continue to assess inflation risks linked to elevated energy costs during the Middle East conflict.

Investors are also closely watching Kevin Warsh’s first press conference as Fed Chair for clues about his views on inflation, labor market conditions, and the outlook for the US economy.

The yield on the benchmark 10-year US Treasury note climbed to 4.43%.

Jeff Buchbinder, Chief Equity Strategist at LPL Financial, said the last thing Warsh wants is a sharp surge in the 10-year Treasury yield, adding that keeping yields below the 4.5% level remains important for markets, particularly after the recent decline in oil prices.

He added that any meaningful shift in monetary policy would likely be gradual and require broad agreement among Federal Open Market Committee members.

Strong retail sales data

Economic data showed US retail sales rose 0.9% in May, beating economists’ expectations for a 0.5% increase.

The gain followed an upward revision to April’s reading, which now showed a 0.4% increase.

Despite the strong report, analysts believe consumer spending could slow in coming months as the boost from tax refunds fades and living costs remain elevated.

According to CME FedWatch data, traders expect the Fed to keep interest rates unchanged for most of the year, with roughly a 43% probability of a 25-basis-point rate hike in December.

Indexes advance as chip stocks outperform

As of 9:41 a.m. New York time:

The Dow Jones Industrial Average rose 77.71 points, or 0.15%, to 52,070.81.

The S&P 500 gained 8.14 points, or 0.11%, to 7,519.49.

The Nasdaq Composite advanced 89.53 points, or 0.35%, to 26,466.52.

US equities have partially recovered from the selloff seen in early June, while the Dow Jones has continued to post record highs over the past two sessions, supported by the resilience of the US economy, broader market participation beyond technology stocks, and lower oil prices.

Oil near three-month lows as SpaceX extends gains

Oil prices remained near three-month lows, supported by expectations that the temporary US-Iran agreement could allow oil flows through the Strait of Hormuz to resume.

However, uncertainty persists after President Donald Trump stated that the memorandum of understanding with Iran is not yet final and warned that military operations could resume if he is dissatisfied with the agreement.

In the stock market, SpaceX shares rose 1.6% after the company surpassed Amazon in market capitalization to become the fifth-largest US company by market value.

Meanwhile, CME Group shares fell nearly 5% after the exchange operator announced that CEO Terry Duffy will step down on March 1 and transition to the role of Executive Chairman.

Market breadth remained positive, with advancing stocks outnumbering decliners by a ratio of 1.18-to-1 on the NYSE and 1.52-to-1 on Nasdaq.

The S&P 500 recorded 15 new 52-week highs and four new lows, while the Nasdaq registered 28 new highs and 38 new lows.