Fed Rate Decision LIVE: Dow, Nasdaq Rise As Traders Shrug Off Hike Jitters

• The yield on 10-year Treasuries declined two basis points to 4.98%
• Germany’s 10-year yield declined one basis point to 3.53%
• Britain’s 10-year yield declined seven basis points to 5.31%

• Bitcoin fell 0.2% to $75,746.42
• Ether fell 0.1% to $2,402.57

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1534
• The British pound fell 0.2% to $1.3452
• The Japanese yen was little changed at 155.17 per dollar

Dow Jones rose 0.05% to 52,115.35, while S&P 500 was up 0.24% to 7,604.17. Tech heavy Nasdaq also rose 0.43% to 26,093.60 minutes after open.

Despite the firmer futures, macroeconomic risks remain significant. Crude oil prices are holding above $100 a barrel, with Brent crude futures down 0.7% at $107.92 a barrel and West Texas Intermediate futures down 1.2% at $104.55. At the same time, Treasury yields have surged on expectations of persistent inflation. The 10-year US Treasury yield was slightly above 5%, while the 30-year yield stood at 5.374%.

Higher bond yields increase the return available from relatively safer assets and can put pressure on equity valuations, particularly when inflation remains above the Fed's comfort zone.

Investors may be positioning ahead of greater clarity on the Fed's rate path.

While a 25-basis-point hike is largely priced in, uncertainty remains over what comes next. Markets are currently assigning a 45% probability of another hike in October and 30% in December.

The Fed's statement and Chair Kevin Warsh's guidance will therefore be closely watched for signals on whether Wednesday's move is a one-off adjustment or the beginning of a sustained tightening cycle. A clearer outlook could help reduce some of the uncertainty currently weighing on risk assets. Investors are likely to focus not only on the rate decision but also on the Fed's assessment of inflation, economic growth and the trajectory of future policy.

US stock futures edged higher on Wednesday despite growing expectations that the Federal Reserve will raise interest rates, potentially marking the beginning of a new rate-hiking cycle over the coming months. S&P 500 futures were up 0.2%, while Nasdaq-100 futures gained 0.4%. Futures linked to the Dow Jones Industrial Average climbed 77 points, or 0.2%, ahead of the Fed's policy decision.

The US Federal Reserve's two-day policy meeting is underway, with markets bracing for a closely watched decision on interest rates. The Fed is widely expected to deliver a 25 basis point hike on Wednesday, which would mark its first rate increase since July 2023.

While the rate hike is largely priced in, investors will turn their focus to the Fed's updated economic projections and “dot plot” for clues on the pace and extent of further tightening. Persistent inflation, elevated energy prices and geopolitical tensions have complicated the outlook, keeping the risk of higher-for-longer rates firmly in focus.