Stocks and index ETFs build on the move higher this week, as the Dow Jones Industrial Average and S&P 500 both gained ground on Wednesday ahead of the Federal Reserve’s upcoming meeting on monetary policy.

The Dow added 204 points, or 0.8%, while the S&P 500 advanced 0.5%. Meanwhile, the Nasdaq Composite climbed just above breakeven early in the session but barely treading in positive waters as of almost noon EST, with most of the FAANGs under pressure.

The major stock index ETFs are mixed to higher along with their underlying benchmarks, with the SPDR Dow Jones Industrial Average ETF (DIA) and SPDR S&P 500 ETF Trust (SPY) climbing and the Invesco QQQ Trust (QQQ) flagging due to slipping tech stocks.

Aside from tech woes, coronavirus stimulus deal headlines have been driving stocks, as the Dow and S&P 500 rallied to their session highs Wednesday after White House chief of staff Mark Meadows expressed optimism regarding the completion of a coronavirus stimulus deal, which was also bolstered by a tweet from President Trump that a larger package would be supported.
Analysts are concerned that the lack of completion of a package could spell trouble for markets, even with Fed intervention.

“The Fed can do what it can, but it can’t supplement fiscal policy,” said Tom Hainlin, global investment strategist at Ascent Private Capital Management.

The Federal Open Market Committee will meet later today to offer projections for GDP, unemployment and inflation. The central bank could offer more lucid guidance on the economic recovery and when rates may climb again, although it is currently expected to keep rates unchanged.

“The Fed doesn’t like to be involved in politics, even though it’s inherently a political institution but two months before an election is a very difficult time to put your politics aside,” David Zervos, chief market strategist at Jefferies, said on CNBC’s “Closing Bell” on Tuesday. “You just have to expect that there’s going to be some thought to politics.

Although they have pulled back some since earlier in the session, technology stocks have rallied over 3% this week, following the Nasdaq’s plummet into correction territory last week, where it recorded its worst weekly performance since March.

“Optimism is being supported by a continual flow of good economic news, healthy earnings news and the prospect of getting more comforting news from the Federal Reserve tomorrow suggesting they remain committed to letting the recovery run hot while continuing to provide supportive policies,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.

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