US Fed meeting in focus as investors seek rate-path hints

The Federal Reserve's balancing act between concerns about a weakening labor market and still above-target inflation will take center stage for investors in the coming week as they weigh risks to the rally in the US stock market.

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The S&P 500 has rebounded sharply over the past two months as worries about the impact of trade barriers on the economy have eased since President Donald Trump's “Liberation Day” announcement on April 2 sent the market plunging.

The rally hit a stumbling block on Friday as stocks fell globally and investors moved to safe-haven assets after Israel launched a military strike on Iran. The Fed's two-day monetary policy meeting could present the next major obstacle for markets. While the U.S. central bank is widely expected to hold interest rates steady when it announces its decision on Wednesday, investors are eager for any hints about whether the Fed might be poised to lower rates in the coming months.

The fed funds rate has been at 4.258-4.508 since the central bank last eased in December, by a quarter percentage point.