*

Fed holds rates steady, as expected

*

U.S. GDP up 3% in Q2

*

Indexes up: Dow 0.03%, S&P 500 0.21%, Nasdaq up 0.41%

(Updates to mid-afternoon trading)

By Chuck Mikolajczak

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 rose 6.03 points, or

0.01%, to 44,639.02, the S&P 500 gained 13.75 points, or

0.22%, to 6,384.61 and the Nasdaq Composite 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 ) and Meta Platforms ( META )

scheduled to report their results after the market

close, while Amazon ( AMZN ) and Apple ( AAPL ) are due to

report on Thursday.

The recent batch of corporate earnings helped buoy equities,

with Teradyne ( TER ) 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 ) posted better-than-expected

third-quarter sales, as its shares edged up 0.4%.

Hershey gained 3.1% on results that topped forecasts. VF

Corp ( VFC ), parent of Vans, surged 7.8%, while Kraft Heinz ( KHC )

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.