Stocks turn higher on Wall Street ahead Fed's rate decision

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NEW YORK (AP) — Stocks turned higher in late morning trading on Wall Street Tuesday as investors await Wednesday’s decision by the Federal Reserve on interest rates.

The S&P 500 rose 0.8% as of 11:38 a.m. Eastern. The Dow Jones Industrial Average rose 209 points, or 0.6%, to 33,278 and the Nasdaq rose 0.3%.

Energy stocks made solid gains following encouraging earnings reports from several oil and gas companies. BP jumped 7.7% after reporting its highest quarterly profit in more than a decade thanks to surging oil and gas prices. Devon Energy rose 8.8% and Diamondback Energy gained 5.5% after they reported strong financial results.

Technology stocks also gained ground after a mixed morning. Many companies in the sector have pricey stock values and therefore have more force in pushing the major indexes up or down. Apple rose 0.6%.

Wall Street’s key focus over the next several days is the Fed. The central bank is meeting on Tuesday and will release a statement on Wednesday. Investors expect it to raise its benchmark rate by twice the usual amount this week as it steps up its fight against inflation, which is at a four-decade high. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

The Fed’s aggressive shift to raise interest rates comes as rising inflation puts more pressure on businesses and consumers. Higher costs for energy and other commodities have prompted many businesses to raise prices and issue cautious forecasts to their investors. Wall Street and economists are worried that higher prices on everything from food to gas and clothing will prompt a slowdown in consumer spending and crimp economic growth.

Bond yields eased. The yield on the 10-year Treasury fell to 2.93% from 2.99% late Monday. Treasury yields have been generally rising all year as investors prepare for higher interest rates, which will make borrowing money more expensive.

Investors have been closely reviewing the latest round of company earnings to get more details on how inflation is impacting business and consumer activity.

Household goods giant Clorox rose 4.6% after reporting solid quarterly profits, but it also cut its profit forecast for the year because of higher costs. Starbucks will report its results later Tuesday. CVS Health will report its financial results on Wednesday.

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