US stocks traded in a narrow range on Wednesday as investors awaited the Federal Reserve's policy decision, while easing oil prices and optimism over a potential US-Iran peace agreement helped support sentiment, according to AP.
Fed Policy Decision in Focus
Markets remained focused on the outcome of the Federal Reserve's two-day policy meeting, with traders widely expecting the central bank to leave interest rates unchanged, AP reported. Treasury yields were little changed ahead of the Fed announcement.
"With weak wage growth and rent growth, underlying forces are pointing to inflation falling sharply once the energy price shock recedes. We don't expect the Fed to hike rates in 2026," Preston Caldwell, chief US economist at Morningstar, said according to the report. "We expect the Fed to resume cutting in 2027." Analysts said the Fed is likely to remain cautious despite pressure from US President Donald Trump to lower borrowing costs.
Oil Markets and Iran Deal
Oil prices remained below the $80-a-barrel mark amid expectations that Iran could reopen the Strait of Hormuz if a tentative agreement with the US is formally signed in Switzerland on Friday, the report noted. Brent crude, the global benchmark, traded around $79.43 a barrel after tumbling more than 5% on Tuesday. US benchmark crude rose 60 cents to $76.65 a barrel.
"Normalizing (oil) flows will take time," economists at HSBC said in a note. "Hurdles include mine clearance, insurance reinstatement, emptying excess Gulf oil storage, repositioning ships, and restarting idled production fields."
Investors were also assessing details of the proposed US-Iran agreement, which reportedly includes provisions allowing Iran to resume oil exports and potential sanctions relief if a broader deal on its nuclear programme is reached.
Equity Moves
On Wall Street, chip stocks recovered after sharp losses in the previous session. Micron Technology gained 3.5% after falling more than 6% on Tuesday, while Intel rose 3.1%, recovering part of its earlier decline. Furniture maker La-Z-Boy surged more than 16% after reporting earnings that exceeded analysts' expectations.
Global Markets Overview
In Europe, Britain's FTSE 100 and Germany's DAX were largely unchanged, while France's CAC 40 rose 0.2%.
Asian markets ended mostly higher, with Japan's Nikkei 225 and South Korea's Kospi touching record highs. Japan's benchmark gained 0.7% after export data showed strong growth in May, while South Korea's Kospi advanced 1.6%, led by technology stocks. Hong Kong's Hang Seng fell 0.7%, while Shanghai's Composite index rose 0.4%.
| Index / Commodity | Change | Level |
|---|---|---|
| S&P 500 | +0.1% | — |
| Dow Jones Industrial Avg | Unchanged | — |
| Nasdaq Composite | +0.5% | — |
| Brent crude | -5% (Tuesday); ~$79.43 | $79.43/bbl |
| US crude (WTI) | +$0.60 | $76.65/bbl |
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