US open: Stocks edge higher as FOMC meeting gets underway

US stocks edged higher early on Wednesday, as investors awaited the start of the Federal Reserve’s highly anticipated two-day rate setting meeting.

Shortly after 1500 BST, the Dow Jones Industrial Average was up 22 points to 16,624.88, while the S&P 500 and the Nasdaq were three and four points higher respectively.

Just over half of analysts polled by Bloomberg expect the Fed to raise interest rates, although the futures market sees nearer a one-in-three chance.

Currency markets are reflecting a 28% chance that they will start raising rates in September, IG’s market analyst Alastair McCaig noted. “Much more likely will be a start date later in the year or early 2016, but the FOMC will be conscious the currency markets’ patience could easily turn to frustration should they continue to tease traders.”

CPI declines for the first time in 2015

On the economic data front, according to the Labor Department, the CPI declined 0.1% month-on-month in September, in line with expectations but down from the 0.1% gain registered in the previous month.

On a year-on-year basis, CPI grew 0.2% last month, maintaining the same rate of growth recorded in August and matching analysts’ estimates.

"Our view remains that the deflationary pressure from low energy prices and a strong dollar will begin to fade early next year," said Steve Murphy, US economist at Capital Economics.

"Together with the fact that the economy is already very close to full employment, this suggests that both wages and core inflation will surprise on the upside next year."

The Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 7% in the week ended 11 September.

The index of loan requests for home purchases, a key indicator of home sales, fell 4% from the previous week.

Elsewhere, Asian stocks were firmly in the black, driven higher by a late surge in Chinese markets, while European equities gained ground.

The dollar was broadly flat against the euro and gained 0.16% against the yen, although it lost 0.71% against the pound.

Gold futures rose 0.90% to $1,112.50, while oil prices climbed steadily. West Texas Intermediate rose 2.49% to $45.74 a barrel, while Brent gained 2.61% to $49.04 a barrel.

SABMiller surges on takeover speculation

In company news, beer giant Anheuser-Busch InBev N.V jumped 6.95% after revealing it plans to submit a takeover offer for rival SABMiller.

As a result, SABMiller shares were over 20% higher in London.

Technology group Hewlett-Packard advanced 3.28% despite announcing plans to cut between 25,000 and 30,000 jobs late on Tuesday, while Adobe Systems will report quarterly earnings after the close.