U.S. stocks rally ahead of Fed decision

NEW YORK, Jan. 31 (Xinhua) -- U.S. stocks rallied on Tuesday, ahead of a key policy decision from the Federal Reserve, as investors digested the latest economic data.

The Dow Jones Industrial Average rose 368.95 points, or 1.09 percent, to 34,086.04. The S&P 500 added 58.83 points, or 1.46 percent, to 4,076.6. The Nasdaq Composite Index increased 190.74 points, or 1.67 percent, to 11,584.55.

All the 11 primary S&P 500 sectors ended in green, with materials and consumer discretionary both up 2.22 percent, leading the advance.

The Fed is widely expected to raise interest rates by 25 basis points when concluding a two-day policy meeting on Wednesday.

The U.S. central bank increased interest rates for seven times last year, boosting the target range for the federal funds rate to 4.25-4.5 percent, in a bid to quell inflation.

Its December dot plot hinted that policy makers saw benchmark rates rising to a median level of 5.1 percent in 2023. Since then, some Fed officials have suggested the Fed might need to go even higher.

On the economic front, the U.S. Labor Department reported Tuesday that the U.S. employment cost index, a barometer the Federal Reserve watches for inflation signs, increased 1 percent in the fourth quarter of 2022, slightly below the 1.1 percent consensus and less than the 1.2-percent reading in the third quarter.

Meanwhile, New York-based The Conference Board reported that the U.S. consumer confidence index fell to 107.1 in January from an upwardly revised 109 in December.

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