The Dow Jones Industrial Average jumped on Wednesday as traders looked ahead to the Federal Reserve's December interest rate decision.

The Dow was higher by about 126 points, or 0.2%. The 30-stock average posted a nine-day losing streak on Tuesday, its longest since 1978. If the Dow were to fall for a 10th day on Wednesday, it would be its worst losing streak since an 11-day slide in 1974.

The S&P 500 inched up 0.1%. The Nasdaq Composite
was higher by 0.07%.

Nvidia which fell into correction territory earlier this week, climbed more than 4%. Nvidia entered the Dow last month. Broadcom, the chip stock seeing big inflows this month as investors dumped Nvidia, pulled back 3%.

The Dow's worst funk in 46 years was mostly caused by a rotation out of old economy shares and into technology stocks, a sector that the century-old measure underweights compared to broader market metrics. Despite the streak, the Dow sits roughly 3% from an all-time high. Other measures of the market are holding up this month, with the S&P 500 in the green for December and sitting less than 1% from an all-time high. The Nasdaq is up nearly 5% this month as investors flooded into tech shares, while shunning the Dow.

"We never say ‘we told you so' because as soon as investors take that posture the market has a way of smacking them down," said Laffer Tengler Investments CEO Nancy Tengler. "But we will point out we have argued the tech trade, in general, is not over, and that we are in the early innings of a sustainable bull market."

The Fed's policy decision is due at 2:00 p.m. ET. Fed funds futures trading currently shows a 95% chance that the central bank will cut interest rates by a quarter percentage point, according to the CME FedWatch tool.

Investors will also be paying close attention to Fed policymakers' Summary of Economic Projections and Fed Chair Jerome Powell's press conference, seeking clues about what might happen in the months ahead. The central bank is widely expected to temper expectations of more rate cuts in the approaching year, particularly as inflation remains stubborn.

"I think we'll get a cut ... but I think the language and the tenor will probably be as hawkish as we've seen from Powell in a while," said Ross Mayfield, investment strategist at Baird. "While they're not going to act on policy that hasn't yet been made, I think that they will be a little hesitant to commit to, say, four-plus rate cuts in 2025 when there's so much unsettled."

In turn, hawkish commentary on Wednesday could tee up stocks for a selloff. But Mayfield added he was optimistic that volatility around Fed meetings usually doesn't linger for very long.(Cay) Newsmaker23

Source: CNBC