Wall Street’s main indexes rose Tuesday, led by financial stocks, as investors awaited the Federal Reserve’s interest rate decision amid rising energy costs.
The Fed began its two-day policy meeting, with markets widely expecting rates to remain unchanged when the decision is announced Wednesday.
Investors are closely watching Chair Jerome Powell’s outlook, with futures now pricing in just one 25-basis-point cut later this year.
Market uncertainty remains elevated due to the ongoing Middle East conflict, complicating the Fed’s ability to assess economic trends and inflation pressures.
Financial stocks led gains, with major banks and asset managers posting strong rebounds after last week’s losses tied to private credit concerns.
Major indexes climbed modestly, while the CBOE volatility index declined, signaling reduced short-term market anxiety despite geopolitical risks.
Airline stocks rebounded as improved demand forecasts lifted sentiment, while energy companies tracked higher oil and gas prices.
Analysts caution that markets may be underestimating the broader economic impact of the conflict, even as U.S. equities show relative resilience.
