Stocks steady after Trump-Kim summit, investors eye Fed

NEW YORK: Wall Street made modest gains on Tuesday while the U.S. dollar rose slightly against a basket of major currencies, with only muted impact from the long-awaited U.S.-North Korea summit aimed at denuclearizing the Korean peninsula.

Investors were more focused on the start of a two-day policy meeting of the Federal Reserve, looking for hints as to whether the U.S. central bank would move to raise rates three or four times this year.

"I don't think (the Fed) is going to say anything particularly related to a rate hike in December," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. "If they say a little too much about inflation, that's going to give the market a reason to get concerned."

The Dow Jones Industrial Average fell 1.58 points, or 0.01 percent, to 25,320.73, the S&P 500 gained 4.85 points, or 0.17 percent, to 2,786.85, and the Nasdaq Composite  added 43.87 points, or 0.57 percent, to 7,703.79.

Twitter Inc rose 5.0 percent after J.P. Morgan raised its price target on the stock by $11 to $50, while Tesla  shares gained 3.2 percent after the company said it is cutting several thousand jobs as part of efforts to become profitable.

After the closing bell, AT&T won U.S. court approval to buy Time Warner Inc for $85 billion. AT&T shares fell 2.6 percent and Time Warner shares rose 3.8 percent, in extended trading following the decision.

The dollar index rose 0.24 percent, steadied in part by data showing that U.S. consumer prices increased in May amid a slowdown in the rise of gasoline costs.

The euro was down 0.28 percent to $1.1749.

SUMMIT SHRUGGED OFF

U.S. President Donald Trump and North Korean leader Kim Jong Un met in Singapore, pledging to work toward complete denuclearization, while Washington committed to providing security guarantees for its old enemy.

The MSCI all-country world index, which tracks shares in 47 countries, gained 0.06 percent.

Investors had mixed reactions to the summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.

"Any de-escalation is good," said Ian Ormiston, a European fund manager with Old Mutual Global Investors.

Others felt the sit-down between Trump and Kim did little to change the game.

"This is more of a case of 'we'll believe it when we see it,' rather than actually reacting," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.

Investors were more focused on the Fed meeting and policy meetings later in the week of the European Central Bank and the Bank of Japan, as well as the positive U.S. inflation data.

The Fed is expected to raise interest rates at the close of its meeting on Wednesday.

"We're eagerly awaiting the Fed, the ECB and the BOJ, in that order," said Gregory Anderson, global head of FX strategy at BMO Capital Markets in New York. "People are reluctant to do a whole lot ahead of that."

Benchmark 10-year U.S. Treasury notes last fell 2/32 in price to yield 2.9645 percent, from 2.957 percent late on Monday.

The 30-year bond last rose 1/32 in price to yield 3.0952 percent, from 3.097 percent.

U.S. crude rose 0.39 percent to settle at $66.36 per barrel, and Brent settled at $75.88, down 0.76 percent, as investors prepared for a key meeting of the OPEC producer group next week.

In Europe, the regional FTSEurofirst 300 index lost 0.02 percent, and the spread between Italian and German 10-year borrowing costs narrowed as the U.S.-North Korea summit drew to a close, following a rally on Monday after reassuring comments from Italy's new economy minister.

The European Central Bank meets on Thursday, with some expecting it to provide guidance for ending its bond-buying program at the end of this year.