US open: Stocks edge higher ahead of FOMC decision

US stocks edged higher early on Wednesday, as investors awaited a rate decision from the Federal Reserve.

Just after 15:00 BST, the Dow Jones Industrial Average was up 60 points, while the S&P 500 and the Nasdaq were one and 12 points higher than Tuesday's close respectively.

All eyes will be on the Federal Open Market Committee, which wraps up its two-day meeting on Wednesday, with a decision on the timing of the first interest rates hike released at 19:00 BST, followed by Chairwoman Janet Yellen’s news conference at 19:30 BST.

While earlier in the year, economist expected a June rate hike, the move is now very unlikely as the May rebound could simply be a false dawn and the Fed is expected to postpone the lift-off until September.

“The Fed will want to be very cautious when it comes to the first hike following such a prolonged economic slump, especially when other central banks are doing the opposite which in itself adds deflationary pressures to the US,” said Oanda’s senior market analyst Craig Erlam.

“They will want to see three months of good figures that point towards future inflationary pressures before they act.”

Meanwhile, the Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, dropped 5.5% in the week ended 12 June.

The seasonally adjusted sub-index of refinancing applications slumped 6.9%, its lowest level since January, while the index of loan requests for home purchases, a key indicator of home sales, declined 4.2%.

Greek worries continue

Elsewhere, European stocks were on the back foot, with investors erring on the side of caution amid ongoing concerns over Greece.

With Greece's €1.5bn debt repayment to the International Monetary Fund due by the end of this month, investors were looking to the Eurogroup meeting on Thursday as the last chance for Athens and its creditors to strike a deal.

“We are still in the eye of the storm and dealers are holding their breath as Athens is weeks away from going bust,” said David Madden, market analyst at IG.

“It is only a matter of time before investors’ fears get the better of them, sparking the next round of selling – there is no point in being long when Greece’s fate is still uncertain.”

Despite the concerns surrounding Greece, the euro edged 0.23% higher against the dollar, which also fell 0.65% against the pound.

The greenback rose 0.48% against the yen, while gold futures slid 0.25% to $1,177.90.

Oil prices staged a solid rebound, with West Texas Intermediate rising 1.28% to $60.75 a barrel, while Brent gained 1.38% to $64.59 a barrel

In company news, coffee chain Starbucks rose 0.78% after announcing it will close its La Boulange pastry shops, while delivery giant FedEx declined 2.83% after its fourth quarter earnings missed expectations.

Software producer Adobe Systems shed 0.27% after issuing a weak second quarter outlook, while computer hardware producer Oracle will report after the closing bell.