Faith in the Fed pushes Wall Street higher

Wall Street climbed on Monday, with Facebook, Apple and Amazon leading the way, as investors awaited a key Federal Reserve meeting that is expected to lay the groundwork for an interest rate cut later this year.

The U.S. central bank is expected to leave borrowing costs unchanged at its two-day policy meeting starting Tuesday, but its statement will provide insight into the impact of the U.S.-China trade war, President Donald Trump's calls for a rate cut and weaker economic data.

With investors expecting a rate cut as early as July, the S&P 500 index has risen 5% this month after tumbling in May due to fears about the U.S.-China trade war.

Buttressing expectations of a rate cut this year, the New York Federal Reserve said its "Empire State" gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

"The Empire manufacturing numbers that came out were dreadful," said Jack Ablin, Chief Investment Officer at Cresset Wealth Advisors in Chicago. "We're back to that the idea that bad news is good news, with the Fed meeting around the corner, and that the Fed will respond with lower rates."

The Fed's rate-setting committee is due to release its statement at 2 p.m. EDT (1800 GMT) on Wednesday, with Fed Chair Jerome Powell holding a press conference shortly after.

The S&P banks index, which tend to benefit from a rising interest rate environment, dipped 0.36%, while the broader S&P 500 financial sector edged down 0.40%.

Volatile investor favorites Facebook, Apple, Amazon, Microsoft and Netflix contributed more than any other stocks to the S&P 500's gain.

At 2:33 p.m. EDT, the Dow Jones Industrial Average was up 0.17% at 26,134.34 points and the S&P 500 had gained 0.23% to 2,893.51.

The Nasdaq Composite added 0.79% to 7,858.39.

Keeping the gains in check for the blue-chip Dow index was a 3.7% decline in Dow Inc after brokerage BMO Capital Markets downgraded the chemicals maker's stock to "market perform" on rising macro uncertainty.

Array Biopharma Inc surged 56.6% after Pfizer Inc  agreed to buy the drugmaker for $10.64 billion to beef up its cancer portfolio. Pfizer was mostly unchanged.

Investors are also looking forward to the G20 summit at the end of the month for an update on the progress in talks to resolve the prolonged trade war between the United States and China.

The S&P 500 posted 35 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 58 new highs and 77 new lows.