Wall Street Awaits Fed Rate Decision After Chip Rally Lifts Nasdaq 1.2%

US stocks head into a pivotal day for interest rates after a rally in chipmakers pushed the Nasdaq Composite up 1.2% on Tuesday. The Fed rate decision is due on Wednesday at 2 p.m. Eastern time.

Semiconductor shares led the gains, helped by fresh enthusiasm for artificial intelligence spending. Hopes of a calmer geopolitical backdrop also supported sentiment, with reports that Iran was discussing conditions to end its conflict with the United States.

Markets largely expect the central bank to hold rates steady. Investors will therefore focus on the tone of the Fed’s statement and any signal about where borrowing costs go next. A surprise in either direction could move stocks, bonds and currencies quickly.

Energy prices remain a worry for policymakers. Brent crude was trading near $110 a barrel on Wednesday, a level that keeps pressure on inflation and complicates the outlook for the Fed rate decision.

Asian shares were mostly higher in early trading on Wednesday, following Wall Street’s lead, while US stock futures were little changed to slightly lower ahead of the Fed rate decision.

For ordinary savers and borrowers, the Fed rate decision matters well beyond Wall Street. US rates influence mortgage costs, the value of the dollar and the price of imports in many countries, including those that rely on dollar-priced fuel.

Source: Associated Press, IC Markets