Stocks rise ahead of expected Fed rate hike

Stocks rose on Wednesday as investors looked ahead to the Federal Reserve's latest decision on U.S. monetary policy.

The Dow Jones Industrial Average traded 53 points, led by gains in IBM. The S&P 500 gained 0.3 percent as communication services outperformed. The Nasdaq Composite advanced 0.4 percent as Facebook, Amazon, Netflix and Alphabet all rose.

The Fed concludes its two-day monetary-policy meeting later in the day and is scheduled to release its decision at 2 p.m. ET. The central bank is largely expected to raise rates by 25 basis points, marking the eighth time it has tightened policy since 2015.

Investors will also look for clues about future moves on monetary policy, especially those before year-end. Market expectations for a December rate hike were above 80 percent on Wednesday, according to the CME Group's FedWatch tool. The Fed has already hiked rates twice this year.

"I have little doubt that the Committee will lift overnight rates by 25 basis points this afternoon," said Jeremy Klein, chief market strategist at FBN Securities. "Furthermore, Jerome Powell and his colleagues will likely signal unambiguously that they intend to do so again in three months."

"The rewriting of the corporate and individual tax code along with inflation roughly matching the central bank's publicly stated target deserves another hike," said Klein.

Source: CNBC

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