Wall St scales higher as tech stocks gain; Fed's rate decision awaited

Technology stocks were biggest gainers among S&P sectors while financial and energy stocks were biggest laggards

Wall Street indexes advanced on Wednesday as technology stocks gained and traders took positions, overlooking concerns of benign inflation ahead of a likely interest rate hike by the Federal Reserve later in the day.

Western Digital gained more than 3 percent and was the biggest tech gainer after the company agreed to settle a dispute with Toshiba.

Apple, Facebook and Paypal rose between 0.9 percent and 2 percent, boosting the Nasdaq.

At 9:32 a.m. ET (1432 GMT), the Dow Jones Industrial Average was up 33.54 points, or 0.14 percent, at 24,538.34 and the S&P 500 was up 3.77 points, or 0.14 percent, at 2,667.88. The Nasdaq Composite was up 23.10 points, or 0.34 percent, at 6,885.42.

S&P futures dipped 0.3 percent overnight on reports of Democrat Doug Jones winning a bitter fight for a U.S. Senate seat in deeply conservative Alabama on Tuesday.

A Jones victory could mean trouble for U.S. President Donald Trump's policy agenda as it narrows the Republicans' already slim majority in the Senate.

Jones is expected to take office in early January. Though his election will not effect the pending votes in Congress on a tax overhaul, it could add pressure on Republicans to get the bill through before the year end.

"With a less Republican seat in Alabama, that is going to expedite the Congress and the Senate to pass the tax bill before the year end, probably by next week," said Peter Cardillo, chief market economist at First Standard Financial.

"It could be on Trump's desk, so that's going to keep the stock market positive."

Technology stocks were the biggest gainers among the major S&P sectors while financial and energy stocks were the biggest laggards.

The Fed is widely expected to raise interest rates by 25 basis points, but more significantly, it may give its strongest hint yet on how the Trump administration's tax overhaul could affect the U.S. economy.

Investors will pay close attention to how it aims to balance a stimulus-fueled economic boost with the ongoing weak inflation and tepid wage growth that has curbed some policymakers' appetite for higher rates.

"I suspect that they (the Fed) will probably elaborate on the tax cuts and future spending of the infrastructure and how they will relate to future inflation," Cardillo added.

A Labor Department report showed underlying consumer inflation slowed in November amid weak healthcare costs and the biggest drop in apparel prices since 1998.

There are concerns among some policymakers that the factors behind the tame inflation could prove more persistent.

Advancing issues outnumbered decliners on the NYSE by 1,448 to 999. On the Nasdaq, 1,344 issues rose and 836 fell.