US stocks treaded water on Wednesday, as investors awaited an almost certain cut in interest rates by the Federal Reserve and hints on whether it could open the door to further easing in monetary policy.
With a quarter-percentage-point reduction in borrowing costs widely expected, focus will be on Fed Chairman Jerome Powell's comment on why the move was necessary and what comes next. The Fed is set to release its policy statement at 2 p.m. EDT (1800 GMT).
Investors are looking beyond the 25-basis-point cut and questioning whether this might be an insurance cut or a shift in monetary policy, said Art Hogan, chief market strategist at National Securities in New York.
Wall Street's main indexes have had a strong run since a steep selloff in May, with the S&P 500 index now up 20% for the year on hopes that a modest rate cut would help combat slowing growth and boost tame inflation.
"There are a lot of risks on the horizon and the Fed in their shift in policy may now be willing to be more proactive than reactive," said Justin Boller portfolio manager at Liquid Strategies in Atlanta, Georgia.
Offering support to the main indexes was Apple Inc's 3.78% gain after the iPhone maker beat quarterly profit and revenue expectations, and forecast strong sales for the current quarter, easing concerns around the impact of the US-China trade war.
This helped the technology sector rise 0.15%, but a 8.43% slide in shares of Advanced Micro Devices Inc capped gains.
The semiconductor maker forecast third-quarter revenue below expectations, hit by lower demand for its chips used in gaming consoles, pushing the Philadelphia Semiconductor index down 1.58%.
The United States and China wrapped up trade talks that both sides described as "constructive," including discussions over further Chinese purchases of American farm goods and an agreement to reconvene in September.
At 12:50 p.m. ET the Dow Jones Industrial Average was up 0.83 points, or flat, at 27,198.85 and the S&P 500 was up 0.76 points, or 0.03%, at 3,013.94.
The Nasdaq Composite was up 9.96 points, or 0.12%, at 8,283.58.
Electronic Arts Inc jumped 4.8%, after the video game publisher posted a quarterly revenue beat, riding on the continued success of its battle royale game "Apex Legends".
Beer maker Molson Coors Brewing Co slid 6.9%, after its quarterly net sales and profit missed estimates on weak demand. The company also said its Chief Executive Officer Mark Hunter was retiring.
Corporate earnings have been robust so far. Nearly 300 of all S&P 500 companies have reported second-quarter results and 74.7% have topped profit estimates, according to Refinitiv data.
The ADP National Employment Report showed private employers added 156,000 jobs in July, above economists' expectations and supporting the view of a firm domestic labor market. This comes ahead of the Labor Department's more comprehensive monthly non-farm payrolls data due Friday.
Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.The S&P index recorded 30 new 52-week highs and two new lows, while the Nasdaq recorded 98 new highs and 50 new lows.