United States stocks open slightly higher as Fed begins policy meeting

United States stocks open slightly higher as Fed begins policy meeting

US stocks ended slightly lower on Wednesday, with major indexes giving up gains in choppy trade after the Federal Reserve raised USA interest rates, while a strong gain in the energy space helped limit losses.

The U.S. central bank as expected raised its policy rate to 1.50-1.75 percent, but disappointed currency traders who had bet it was prepared to raise rates four times this year as the jobs market approaches full employment.

The Fed is near certain to raise interest rates on Wednesday, the end of its two-day policy meeting.

Markets were also spooked by signs of a brewing global trade war - a Wall Street Journal report saying China was planning counter-measures against U.S. trade tariffs.

Facebook shares gained 3 percent and provided some relief to the technology sector.

"So far, we have seen low-level (trade) skirmishes, which are not material enough to affect the world economy", said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

"The economic situation post-tax cuts also justifies a significant shift upwards in the dot plot", he added, referring to fears the Fed's de facto policy forecast chart will signal four rate rises rather than three because of the effects of U.S. tax reforms.

A pan-European equity index fell nearly 0.3%, its early weakness accelerating after the WSJ report on China and a tech shares index reversing an early bounce.




Crude oil hit a six-week high after a surprise decline in US inventories, strong compliance on OPEC production cuts, and persistent concern related to the Iran nuclear deal.

Traders now expect two more rate hikes later this year, although they said policymakers could set a hawkish tone by forecasting four increases in their "dot plot" projections.

Concerns over the imposition of USA trade tariffs on metals and against China continue to weigh on financial markets. Emerging market stocks lost 0.10 percent.

Crude oil prices jumped more than 2 percent to $63 per barrel.

The energy index.SPNY jumped 2.76 percent as crude oil prices hit a six-week high after a surprise decline in US inventories and as concern persisted over possible disruption to Middle East supply.

Stocks have struggled this year while bond yield have moved higher. Its shares were down 1.5 percent in premarket trading, on track for its third day of losses amid uproar over the alleged misuse of users' data.

Winners and Losers: Shares of Facebook fell 2.56 percent as the social media company battles accusations that Cambridge Analytica, a private data firm, obtained information on 50 million users without permission.

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