US open: Stocks rise ahead of FOMC interest rate announcement

US stocks edged higher on Thursday as oil prices rebounded and US inflation slowed less than expected ahead of the Federal Reserve’s policy announcement.

At 1536 GMT, the Dow Industrial Average rose 0.12%, the S&P 500 grew 0.13% and the Nasdaq was up 0.24%.

Oil prices rose after Qatari oil minister Mohammed Bin Saleh Al-Sada said that producers from and outside the Organization of the Petroleum Exporting Countries will meet on 17 April in Qatar to discuss a proposal to freeze output to address the supply glut.

The Energy Information Administration revealed an increase in crude stockpiles of 1.3 million barrels in the US last week, below the expected 3.4 million build.

West Texas Intermediate jumped 3.9% to $37.74 per barrel and Brent crude increased 3.2% to $40.05 per barrel at 1536 GMT.

Meanwhile, the US consumer price index increased 1.0% in February from a year ago, beating forecasts for a 0.9% increase, down from January’s 1.4% year-on-year gain. On the month, CPI fell 0.2% in February as expected, compared to 0% month-on-month in January.

Excluding volatile items including food and energy, CPI rose to 2.3% year-on-year in February from 2.2% in January, surprising analysts who had expected no change. Month-on-month core CPI held at 0.3%, more than the 0.2% that was forecast.

“In short, it is now blindingly obvious that inflation is trending higher, and we can have no faith that the upward trend will stop anytime soon,” according to Pantheon Macroeconomics.

“We think it very likely that the Fed's 2% target for core PCE inflation will now be reached in the fall of this year, some two years earlier than their December forecasts.”

The Fed will announce its latest policy decision at 1800 GMT and is expected stand pat on interest rates amid concerns about a global economic slowdown.

Ahead of the announcement, Fed data revealed US industrial production fell 0.5% in February, dragged lower by utilities and mining, compared with a 0.8% rise in January. Economists had been expecting a 0.3% decline.

US housing starts rose a little more than expected in February, the Commerce Department said. Housing starts were up 5.2% to an annual pace of 1.18m, surpassing economists’ expectations for an increase to 1.15m. January’s starts were revised up to 1.12m from 1.099m.

In company news, Peabody Energy tanked after saying it may not have enough liquidity to continue operating.

Chipotle Mexican Grill was also in the red after it forecast a first quarter net loss.

On the upside, software firm Oracle Corp rose after its third-quarter results beat analysts’ expectations.

In currencies, the US dollar rose 0.40% against the pound, increased 0.41% versus the euro and gained 0.44% versus the yen.