Stock market today: Wall Street drifts higher ahead of Fed announcement

NEW YORK (AP) — U.S. stocks are drifting higher Wednesday as Wall Street waits to hear what the Federal Reserve will say in the afternoon about where interest rates may be heading.

The S&P 500 was up 0.3% in early trading. The Dow Jones Industrial Average was up 129 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.

The modest moves are a respite following weeks of sharp and scary swings for the U.S. stock market. Uncertainty is high about how much pain President Donald Trump will allow the economy to endure in order to remake the system as he wants. He’s said he wants manufacturing jobs back in the United States and far fewer people working for the federal government.

Trump’s barrage of announcements on tariffs and other policies have created so much uncertainty that economists worry U.S. businesses and households may freeze and cut back on their spending.

If the economy gets too weak, the Fed could cut interest rates in order to give it a boost, as it has in so many prior downturns. It has plenty of room to cut, with its main interest rate sitting at a range between 4.25% and 4.50%.

But conditions may be more complicated for the Fed this time around. Lowering rates would also push inflation upward, and worries about inflation are already high because of tariffs. The Fed does not have a good tool to fix what’s called “stagflation,” where the economy is stagnating but inflation remains high.

Virtually all of Wall Street is expecting the Fed to announce no change to its main interest rate this afternoon, as it waits to see how conditions play out. What will be more important is the set of forecasts the central bank will release after the meeting is over. That will show where Fed officials see interest rates, the economy and inflation heading in upcoming years.

The expectation among traders is that the Fed will cut rates at least two or three times by the end of 2025.

On Wall Street, Nvidia helped support the market after rising 1.1% to cut its loss for the year so far to 13.1%. It hosted an event Tuesday where it largely “did a nice job laying out the roadmap” and fighting back against speculation the industry is seeing a slowdown in demand for computing power, according to UBS analysts led by Timothy Arcuri.

Tesla also rose 3%, following two straight losses of roughly 5%. It’s still down 42.5% for 2025 so far.

Big Tech has been at the center of the market’s recent sell-off, as stocks whose momentum had earlier seemed unstoppable have since dropped sharply following criticism they had simply grown too expensive.

On the losing side of Wall Street Wednesday was General Mills, which fell 2.3%. The cereal and snack maker missed Wall Street sales targets and lowered its full-year outlook. The company said it expects “macroeconomic uncertainty” to continue to impact consumers in the current quarter.

In stock markets abroad, Japan’s Nikkei 225 slipped 0.2% after the Bank of Japan held steady on its own interest rates, as was widely expected. Japan also reported a trade surplus for February, with exports rising more than 11% as manufacturers rushed to beat rising tariffs imposed by Trump.

Other indexes were mixed across Europe and Asia.

In the bond market, the yield on the 10-year Treasury slipped to 4.29% from 4.31% late Tuesday.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.