S&P 500 is flat near a record with all eyes on Federal Reserve’s update

U.S. stocks were mostly flat on Wednesday ahead of theFederal Reserve’s updateon monetary policy.

The Dow Jones Industrial Average traded 20 points higher. The S&P 500 inched up 0.1%, sitting just a few points below an all-time high reached in the previous session. The tech-heavy Nasdaq Composite edged up 0.2%.

Large tech shares like Tesla and Nvidia were slightly lower, while shares of economic reopening plays Royal Caribbean and Carnival gained 1% each.

Stocks pulled back from record levels duringTuesday’s trading session, with the S&P 500 closing 0.2% lower after hitting an all-time intraday high earlier in the day. The Dow slid nearly 100 points and the Nasdaq Composite dipped 0.7% amid weakness in shares of Big Tech.

The Federal Reserve kicked off its two-day meeting on Tuesday. The central bank is not expected to make any policy moves, but it could signal that it’s beginning to think abouteasing its bond-buying policy. The Fed will also release new forecasts on Wednesday, which could indicate a possible first rate hike penciled in for 2023. Previously, Fed officials hadn’t come to a consensus for a rate hike through 2023.

The Fed’s statement and forecasts will come out at 2 p.m. ET followed by a press conference by Chairman Jerome Powell 30 minutes later.

The meeting comes as inflation heats up, with producer prices rising at their fastest annual rate in nearly 11 years duringMay, a report on Tuesday showed. This has prompted some, including Paul Tudor Jones, to call for the central bank to re-think its easy monetary policy.

"I still think equities are going higher," BlackRock global bond chief Rick Rieder said on CNBC's "Squawk Box" on Wednesday. "If we don't hear anything different, then I worry a little bit about risk the system creates — you can create asset bubbles you can create leverage. We've seen markets that are a little bit concerning with literally zero spread to them for risk assets."

The central bank has been buying $120 billion worth of bonds each month as the economy continues to recover from the coronavirus pandemic.

"The drama this week will be whether the Fed sits tight or admits that inflation is rising and that the Fed needs to tighten," said Brad McMillan, CIO at Commonwealth Financial Network. "Since the Fed has a dual mandate—unemployment and inflation—that suggests it should indeed keep its focus on unemployment, rather than inflation."

Minutes from the central bank's last meeting showed that some Fed officials said it could be appropriate to start discussing adjustments to the bond-buying program should the economy continue to recover. Economists predict that while some of these discussions could begin, concrete details will not be revealed until later this year.

On Wednesday,China said it will release industrial metalsincluding copper, aluminum and zinc from its national reserves to curb commodity prices. Copper price has fallen more than 10% from its record high, dipping into correction territory on Tuesday.