Wall Street records modest gains as FOMC meeting gets underway

Major equity indexes in the U.S. on Tuesday traded in relatively narrow ranges on Tuesday but were able to close higher led by gains financial and technology shares.

Rising Treasury-bond yields boosted the S&P Financials Index, which closed the day 0.8% higher. Commenting on the robust performance of bank stocks, "there's one school of thought that rates will go up because there's some inflation coming from a very tight labor market and storms that will create very tight demand," Rick Meckler president of LibertyView Capital Management in Jersey City, New Jersey, told Reuters.

Market speculation over the possibility of a merger between two of the biggest U.S. wireless carriers T-Mobile and Sprint helped the telecom services sector .SPLRCL add nearly 2% and become the best performing sector of the day. This move also lifted the technology sector 0.5% higher.

On Wednesday, market action in the first half of the session is expected to remain subdued before the FOMC releases its monetary policy statement. "People are in wait-and-see mode. The expectations are that rates will remain unchanged and they (the Fed) will start balance sheet unwinding. But there's always a possibility of surprise. I think that's why investors are cautious," Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusett, told Reuters on Tuesday.

The Dow Jones Industrial Average added 40.45 points, or 0.18%, to 22,371.80, the S&P 500 rose 2.74 points, or 0.11%, to 2,506.64 and the Nasdaq Composite gained 6.14 points, or 0.1%, to 6,460.78.

Headlines from the NA session:

• US Dollar loses traction, drops towards mid-91s as investors step back ahead of FOMC
• US Pres. Trump: If US is forced to defend itself or its allies, we will have no choice but to destroy N. Korea
• US Pres. Trump: Iran deal was one of the worst and one-sided transactions
• US Current Account at 9-year high: not a worry - Wells Fargo
• US: August Housing Starts edged lower - Nomura
• Atlanta Fed: GDPNow model forecast for real GDP growth in Q3 steady at 2.2%
• US: Homebuilding looked solid prior to the storms - Wells Fargo
• US: Privately-owned housing starts in August were at 1,180,000, 0.8% below July estimate
• US: Import prices increased 0.6 percent in August
• US: Current-account deficit increased to $123.1 billion in the second quarter of 2017