(Reuters) – Wall Street’s main indexes posted small gains on Tuesday as bank shares gained in anticipation of an interest rate hike by the Federal Reserve at its two-day policy meeting.
A historic summit between President Donald Trump and North Korean leader Kim Jong Un failed to excite investors as their joint statement offered few details on their pledge to denuclearize the Korean peninsula.
“Markets are skeptical,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. “This is more of a case of ‘we’ll believe it when we see it’, rather than actually reacting.”
At 10:02 a.m. ET, the Dow Jones Industrial Average was down 20.07 points, or 0.08 percent, at 25,302.24, the S&P 500 was up 1.70 points, or 0.06 percent, at 2,783.70 and the Nasdaq Composite was up 13.85 points, or 0.18 percent, at 7,673.78.
Six of the 11 major S&P sectors were lower, led by a 0.3 percent decline in the healthcare index.
Twitter surged 5.2 percent, providing the biggest boost to the S&P after J.P. Morgan raised its price target by $11 to $50.
Tesla surged 3.4 percent after Keybanc raised its estimates for Model 3 deliveries for the second quarter and full-year.
The S&P banks index rose 0.5 percent, led by JPMorgan and Wells Fargo.
The Fed is widely expected to raise interest rates for the second time this year.
Investors are focused on how the U.S. central bank characterizes its monetary policy as borrowing costs return to more normal levels, while also looking for hints if the Fed would move to raise rates three or four times this year.
“The market would take two more in stride. The last time, the Fed was pretty evenly split (on three or four rate hikes). There would be a shift, but only a shift at the margins, which would be interpreted as a sign of the economy continuing to strengthen.”
Economic data showed U.S. consumer prices rose marginally in May amid a slowdown in the pace of increases in the cost of gasoline, pointing to moderate inflation pressures.
With inflation flirting with the Fed’s 2 percent target, policymakers have in recent days signaled they would not be too concerned if it overshot the target.
Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.17-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and one new lows, while the Nasdaq recorded 75 new highs and 11 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva
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