Stock trading is muted as investors wait for Fed statement

U.S. stock indexes moved sideways in afternoon trading Wednesday on Wall Street ahead of a highly anticipated Federal Reserve statement on interest rates.

The muted trading follows two days of gains that are driving a June rebound in stocks after a dismal sell-off in May. The broad S&P 500 index is within striking range of its all-time high, set on April 30.

Financial companies, including banks, led the early gainers as bond yields rose. The higher yields allow banks to charge higher interest rates on loans. SunTrust Banks rose 1% and Bank of America gained 1.1%.

Drug developer Allergan climbed 5.1%, helping to drive gains for health care stocks. Cardinal Health rose 1.3%.

Software maker Adobe rose on solid profit results and did most of the heavy lifting for technology companies, though the sector was wobbling overall between small gains and losses.

Homebuilders and retailers helped pull down the consumer discretionary sector. PulteGroup dropped 3.5% and D.R. Horton slid 3.4%. Best Buy fell 1.6%.

Communications stocks also fell. Facebook dropped 1.5% as it faces Congressional criticism over its cryptocurrency plans. Video game publisher Activision Blizzard slid 1.6%.

Stocks opened the week higher and rallied on Tuesday after President Donald Trump said he plans to meet with China's president at the end of the month to discuss their ongoing trade war. The announcement injected some hope into a market that has been volatile because of concerns over the lingering trade dispute and its potential impact on economic growth.

The market has rallied in the past and then dipped again because of seemingly good news on trade talks that did not result in any concrete progress.

KEEPING SCORE: The S&P 500 was essentially flat, down less than 0.1%, as of 1:37 p.m. Eastern time. The Dow Jones Industrial Average rose 11 points, or less than 0.1%, to 26,476. The Nasdaq composite was down 0.1%.

Major stock indexes in Europe were mixed.

ANALYST'S TAKE: While trade issues and the Federal Reserve's next move on interest rates are dominating headlines, the U.S. economy remains strong despite slower growth, said James Ragan, director of wealth management research at D.A. Davidson.

"Our feeling is that the consumer is in pretty good shape still, but business investment has started to slow," Ragan said.

The biggest issue looming over the market remains the U.S. trade war with China, but investors should continue focusing on long-term plans while keeping their portfolios diverse enough to weather volatility in the market, Ragan said.

FED FOCUS: Investors are waiting for a highly anticipated statement from the Federal Reserve this afternoon that could help give more direction on the future of interest rates.

The central bank isn't expected to cut rates today, but it has already signaled that it is prepared to take that action in order to help stabilize the U.S. economy if trade disputes cut into growth. Investors are betting on at least one interest rate cut this year, possibly as early as July.

The Fed's statement comes a day after the head of the European Central Bank said it was ready to cut interest rates and provide additional economic stimulus if necessary.

REVENUE CLOUDS: Adobe climbed 4.4% after the software maker's cloud computing gains helped the company report earnings that easily beat analysts' estimates. A bright spot was the 34% growth in digital media as the company takes advantage of growth in the cloud computing sector.

FAMILY REUNION? Viacom rose 1.7% after The Wall Street Journal reported that the media company is discussing a reunification with CBS. A push for more formal talks would mark the third time the companies tried to reunite after splitting apart over a decade ago.