*

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 with Fed policy statement)

By Chuck Mikolajczak

July 30 (Reuters) -

U.S. stocks were slightly higher in choppy trade on

Wednesday, after the Federal Reserve held rates steady, as was

widely expected, as investors awaited 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.

"The Fed probably wishes it waited until next Wednesday to

have this meeting so they could have the employment numbers to

look at," said Brian Jacobsen, chief economist at Annex Wealth

Management, Menomonee Falls, Wisconsin

"It's setting up to be an awful lot like last year when,

in hindsight, they wished they'd have cut in July and so they

did a catch-up cut in September."

The Dow Jones Industrial Average rose 14.93 points,

or 0.03%, to 44,647.92, the S&P 500 gained 13.50 points,

or 0.21%, to 6,384.14 and the Nasdaq Composite gained

85.95 points, or 0.41%, to 21,184.57.

With the Fed widely expected to "hold" rate cuts at the end

of its meeting, analysts are eager for Powell's comments for any

hints on future policy direction, especially as the central bank

navigates political pressure and assesses the effects of tariffs

on inflation.

Traders see about a 68% chance of a September rate cut,

according to the LSEG data.

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.