NEW YORK: Major US indices gained at the open Wednesday as traders awaited the conclusion of the Federal Reserve’s meeting later in the day, when central bankers are expected to hike interest rates.

The United States is facing high inflation, and top Fed officials have strongly signaled a quarter-point rate increase at this meeting, the first of several to come this year as the central bank looks to end its easy money policies to curb the price increases.

While low borrowing costs have helped markets prosper over the past two years despite the Covid-19 pandemic, Patrick O’Hare of Briefing.com said increases are generally priced in to equities, which have fallen sharply in recent weeks.

Sentiment, he said, was being helped in part by hopes for peace talks to end the war between Russia and Ukraine – which has contributed to recent selloffs – as well as big gains in trading in Hong Kong.

“The supposition with respect to today’s policy decision is that it could ultimately translate into a buy-the-fact event since the market has already sold the rumor. That sentiment has carried over this morning, causing some short squeezing action and presumably some fear of missing out on further gains,” O’Hare said.

Wall Street surges in broad rally as oil prices slide; Fed in focus

About 10 minutes into trading, the benchmark Dow Jones Industrial Average was up 1.3 percent at 33,973.35, and the broad-based S&P 500 climbed 1.4 percent to 4,321.97.

The tech-rich Nasdaq Composite Index gained 1.7 percent to 13,172.27.

Starbucks was up 5.8 percent after longtime chief Howard Schultz announced he would return to lead the company on an interim and Kevin Johnson would step down, as the coffee giant faces a unionization drive at US stores.

“It’s a good morning brew, then, for SBUX, just as it is for the broader market, which has been caffeinated by some positive-minded feelings,” O’Hare said in a commentary.