July 30 (Reuters) - U.S. stocks rose modestly in choppy trade on Wednesday, after the Federal Reserve held rates steady, as was widely expected, and investors digested comments from Chair Jerome Powell for signs of when the central bank may reduce borrowing costs.
The central bank said "the unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated," in a split decision that saw two governors dissent and gave little insight into when rates will be lowered.
Stocks were modestly higher before the Fed statement as investors assessed the first reading of second-quarter economic growth, which was stronger than expected, but underlying details indicated an economy that was likely losing strength.
"There wasn't too much of a change in the statement here, still showing concerns about how these tariff policies will come through and probably yet to rely on the data that's come through, you can see that just in the GDP report, how much noise is going on in each of these releases right now," said JP Powers, chief investment officer at RWA Wealth Partners in Boston.
"If I were Powell, I don't know how much he thinks about his legacy, but I think he's going to err on the side of probably being too late to cut rates here on his way out rather than risk any flare-up just as he's heading off into the sunset."
The Dow Jones Industrial Average (.DJI), rose 6.03 points, or 0.01%, to 44,639.02, the S&P 500 (.SPX), gained 13.75 points, or 0.22%, to 6,384.61 and the Nasdaq Composite (.IXIC), gained 96.42 points, or 0.46%, to 21,194.71.
Investors were assessing comments from Powell in the wake of the statement for any hints on future policy direction, especially as the central bank navigates political pressure from the White House and gauges the effects of tariffs on inflation.
Traders see about a 68% chance of a September rate cut, according to the LSEG data, up from about 60% before the statement.
Earlier data in the ADP employment report showed private payrolls grew by 104,000 in July, topping forecasts of 75,000, the latest in a string of labor market data this week before Friday's government payrolls report.
Investors were also awaiting earnings from several megacap companies this week, with Microsoft (MSFT.O), and Meta Platforms (META.O), scheduled to report their results after the market close, while Amazon (AMZN.O), and Apple (AAPL.O), are due to report on Thursday.
The recent batch of corporate earnings helped buoy equities, with Teradyne (TER.O), surging more than 19% as the best performer on the S&P 500 after its quarterly results.
Solid earnings from a host of consumer-facing names also put the resilience of shoppers on display.
Starbucks (SBUX.O), posted better-than-expected third-quarter sales, as its shares edged up 0.4%.
Hershey (HSY.N), gained 3.1% on results that topped forecasts. VF Corp (VFC.N),parent of Vans, surged 7.8%, while Kraft Heinz (KHC.O), advanced 1% after both companies beat quarterly revenue estimates.
Still, the tariff overhang remained, as U.S. President Donald Trump signed an executive order implementing an additional 40% tariff on Brazil, bringing the total tariff amount to 50%.
Declining issues outnumbered advancers by a 1.17-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.01-to-1 ratio on the Nasdaq.
The S&P 500 posted 30 new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 70 new highs and 80 new lows.
Reporting by Chuck Mikolajczak, additional reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru Editing by Marguerita Choy
