U.S. stocks rise as investors await the Fed's latest rate decision

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U.S. stocks rise as investors await the Fed's latest rate decision

Investing.com -- U.S. stocks lost some momentum but remained higher Wednesday as investors await the latest Federal Reserve decision on interest rates later today.

At 11:10 ET (17:27 GMT), the Dow Jones Industrial Average was up 212 points or 0.6%, while the S&P 500 was up 0.3% and the NASDAQ Composite was up 0.6%.

The main indices on Wall Street closed the month higher for the day, attempting to regain their footing at the end of a bruising October.

The blue chip Dow fell 1.4% and the broad-based S&P dropped 2.2% last month, resulting in their first three-month losing streak since March 2020. The tech-heavy fell 2.8%, its worst October since 2018.

Fed’s policy decision in spotlight 

Investors have been worried about the potential for the Federal Reserve to keep interest rates at elevated levels, or even higher, for longer than previously expected, especially in the wake of last week’s strong third quarter economic growth estimates.

The U.S. central bank concludes its latest two-day policy meeting later in the session. Investors widely expect the Fed to hold rates steady, and comments from Chair Jerome Powell will again take the spotlight as investors parse every word to gauge if another interest rate increase is on the cards later this year.

ADP payrolls lower than expected ahead of Friday’s key report 

The October ADP private sector payrolls came in at a lower than the expected 113,000 though still stronger than the September reading. In a sign that labor demand remains healthy, however, the September JOLTS job openings topped economists estimates.

These come ahead of Friday’s jobs report which will give the Fed and investors a new detailed reading on the state of the still-tight labor market.

Investors will also keep an eye on the country’s future refinancing plans, with yields close to historic highs, even after the Treasury forecasted a lower fourth-quarter borrowing need than previously flagged.

Advanced Micro Devices rallies to lift chip stocks

Advanced Micro Devices Inc (NASDAQ: AMD ) rallied more than 8% as the chipmaker's weaker-than-expected current-quarter guidance was cast aside after the company touted strong demand for its artificial intelligence chips. AMD also reported better-than-expected Q3 results .

The company said it expects to sell $2 billion of graphics processing units used in the development of AI programs that some on Wall Street say should boost its data center business, removing the drag from other businesses including gaming. 

"[T]his should once and for all remove the overhangs from these businesses and shift the focus to AI where it has a unique, rapidly growing, and large (relative to AMD's size) AI opportunity that should start to really hit in 2024/2025," UBS said in a note, though cut its price target on the stock to $135 from $145.

Earnings season continues in force

There are a number of companies due to report earnings, including fintech PayPal (NASDAQ: PYPL ) and home share company Airbnb (NASDAQ: ABNB ). Norwegian Cruise Lines beat profit expectations but guided to fourth quarter results below expectations citing operational impacts from external events including the conflict in the Middle East. Shares fell 3.1%.

Match Group (NASDAQ: MTCH ) stock slumped 17% after the Tinder dating app parent offered up disappointing revenue guidance for the fourth quarter.

Energy stocks inch higher as oil gains 

Energy stocks were marginally higher intraday, underpinned by rising oil prices following official data from the Energy Information Administration showing weekly U.S. crude stockpiles rose less than expected last year. 

Marathon Petroleum Corp (NYSE: MPC ), Phillips 66 (NYSE: PSX ), and Coterra Energy Inc (NYSE: CTRA ) were among the biggest gainers in the energy sector.

--Liz Moyer contributed to this report

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