Fed expected to hold rates steady, signal neutral bias

Wall Street's major indexes edged higher in choppy trading on Wednesday, as chip stocks rebounded ahead of the first interest rate decision under new Federal Reserve Chair Kevin Warsh. Policymakers are widely expected to hold interest rates unchanged at the 3.50%-3.75% range as they wrestle with inflation pressures from higher oil prices fueled by the Middle East war.

Investors will also keep a close watch on the new Fed chair's first press conference for his views on inflation, unemployment and the economic outlook. The 10-year Treasury yield, the benchmark for global borrowing costs, edged higher to 4.43%. Data showed U.S. retail sales increased more than expected in May, jumping 0.9% after a downwardly revised 0.4% gain in April, though a slowdown is likely as consumer cushions deplete.

Traders see the Fed holding rates through much of the year, but are betting on a nearly 43% chance of a 25-basis-point rate hike in December, according to CME Group's FedWatch tool. U.S. stocks have partially recovered from an early June slump, with the blue-chip Dow touching record highs for the past two sessions, aided by a resilient U.S. economy, a broadening of the rally beyond tech shares, and falling oil prices.