Stocks rattle as traders cautious before Fed rates call

Stock markets mostly sinked on Tuesday as investors awaited a US Federal Reserve interest-rate decision for signs of the outlook for the tariffs-hit economy.

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Oil prices staged a comeback after tanking on news of an output hike by key OPEC+ producers that came despite growing concerns cover a slowdown in the global economy, which could hit demand.

Wall Street’s main three indices were lower in midday trading.

“Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve's FOMC meeting, which kicks off today,” said David Morrison, senior market analyst Trade Nation.

The US Federal Reserve is expected to hold interest rates steady on Wednesday, even as President Donald Trump pushes for more cuts.

While data last week showed the US economy contracted in the first quarter, strong jobs and services sector figures suggest there is still some resilience.

“It's a big week for central bank interest rate decisions,” noted AJ Bell investment director Russ Mould.

“The key focus will be on forward-looking commentary and whether the Fed is getting worried about Trump's tariffs,” Mould added.

The US dollar was lower against major rival currencies.

On Thursday, the Bank of England is expected to cut its key rate by a quarter point to 4.25 per cent amid concerns of weak growth in Britain.