Australian shares set for gains after Wall Street rise

The news: The Australian sharemarket is set to start higher, tracking gains on Wall Street where major indices rose on the eve of the US Federal Reserve's monetary policy update.

The numbers: The Dow Jones index rose 0.37%, the broader S&P 500 gained 0.65%, while the tech-heavy Nasdaq closed 0.48% higher. In the local market, ASX 200 futures were trading 35 points or 0.52% higher at 6818 points at 0700 AEDT on Wednesday.

The context: The overnight gains come despite a mixed bag of earnings reports and ongoing jitters over the Middle East conflict. The Fed on Wednesday kicked off a two-day monetary policy meeting at which the US central bank is widely expected to hold interest rates steady. Investors will monitor Fed Chair Jerome Powell's comments for clues about its future plans. Earlier, data showing a solid increase in US labour costs in the third quarter, prompting some concerns it would encourage the Fed to keep rates higher for longer.

What they said: "Today's move back into positive territory is on the growing consensus the Fed is more likely to hold off on any more rate hikes this year," Greg Bassuk, chief executive of AXS Investments in New York told Reuters.