Feb 22 (Reuters) - Wall Street's main indexes edged higher in choppy trading on Wednesday, a day after their worst performance of the year, as investors awaited minutes from the Federal Reserve's policy meeting for fresh clues on the trajectory of interest rates.
U.S. stocks shed more than 2% on Tuesday after a rebound in business activity in February stoked fears of interest rates staying higher for longer.
Minutes from the Fed's Jan. 31-Feb. 1 meeting, due at 2:00 p.m. ET, are expected to detail the breadth of debate at the central bank about the rate hike path.
"Few members of the Fed have talked publicly about the case for a 50 bp hike and investors would want to gauge how serious that discussion is within the central bank," said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management Co.
St. Louis Fed President James Bullard, who advocated for a half-point increase at the Fed's last session, said the U.S. central bank needs to get inflation toward its 2% goal this year to avoid its prolonged impact.
New York Fed President John Williams, a voting member of the rate-setting committee this year, is scheduled to speak later in the day.
Following a market rout in 2022, the three major indexes logged monthly gains in January as investors hoped the Fed would pause its rate hikes and perhaps pivot around year-end.
However, stocks have had a volatile run in February, leaving the Dow flat for the year as traders priced in higher interest rates for longer, assuming that inflation remains higher in a sturdy economy.
Money market participants expect rates to peak at 5.35% by July and stay around those levels till the end of 2023.
At 12:29 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 87.29 points, or 0.26%, at 33,216.88, the S&P 500 (.SPX) was up 8.86 points, or 0.22%, at 4,006.20, and the Nasdaq Composite (.IXIC) was up 31.84 points, or 0.28%, at 11,524.14.
Nine of the 11 major S&P 500 sectors gained, with consumer discretionary stocks (.SPLRCD) climbing 0.9%.
Analysts polled by Reuters expect the S&P 500 index to advance 5% by year-end, but high-interest rates and inflation have led many strategists to predict a correction within the next three months.
Growth names like Tesla Inc (TSLA.O), Nvidia Corp (NVDA.O), Qualcomm Inc (QCOM.O) and Amazon.com Inc (AMZN.O) edged higher as the yield on 10-year U.S. Treasury notes slid from multi-month highs.
Palo Alto Networks Inc (PANW.O) rose 11.6% after the cybersecurity company raised its annual profit forecast.
CoStar Group (CSGP.O) dropped 4.0% as the online real estate marketplace provider said it was no longer in talks to buy Realtor.com-owner Move Inc from News Corp (NWSA.O) and forecast disappointing first-quarter revenue.
Advancing issues outnumbered decliners by a 1.69-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.27-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and one new lows, while the Nasdaq recorded 21 new highs and 92 new low.
