People wearing face masks walk past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Wednesday, Jan. 26, 2022. Asian shares were mixed in muted trading Wednesday as many stayed on the sidelines ahead of a U.S. Federal Reserve meeting that will indicate how aggressive it will be in fighting inflation. (AP Photo/Kin Cheung)

AP

Global shares were mixed on Wednesday, with many investors staying on the sidelines ahead of an update on how aggressively the Federal Reserve will tackle inflation.

France’s CAC 40 added nearly 1.0% in early trading to 6,903.90, while Germany’s DAX gained 1.2% to 15,309.64. Britain’s FTSE 100 rose 1.2% to 7,461.86. The future for the Dow industrials climbed 0.3% to 34,287.00. The S&P 500 future was 0.4% higher at 4,367.50.

Stocks have gyrated this week as markets focused on whether the U.S. central bank will clarify just how fast it plans to tighten credit and potentially slow the economy. The Fed’s two-day meeting wraps up on Wednesday.

At the same time, tensions over the Russia and Ukraine tensions continue to grab attention.

Ukraine’s leaders have reassured their country that an invasion from neighboring Russia is not imminent but acknowledged the threat is real and received a shipment of U.S. military equipment to shore up their defenses.

Moscow has denied it is planning an assault, but it has massed an estimated 100,000 troops near Ukraine in recent weeks and is holding military drills at multiple locations in Russia. That has led the United States and its NATO allies to rush to prepare for a possible war.

“Market volatility remains elevated as investors are still feeling jittery over a very tense Ukraine-Russia situation, a whole range of inflationary issues that include a potentially aggressive Fed and a global chip problem that just won’t get any better,” Edward Moya of Oanda said in a commentary.

Japan’s benchmark Nikkei 225 slipped 0.4% to finish at 27,011.33. South Korea’s Kospi edged down 0.4% to 2,709.24. Hong Kong’s Hang Seng was little changed, gaining less than 0.1% to 24,245.17, while the Shanghai Composite rose 0.7% to 3,455.67. Australian markets were closed for a holiday.

Some on Wall Street worry that the Fed may signal it plans a half-point increase in its key rate. There is also concern that Fed Chair Jerome Powell could suggest that the central bank will raise rates more times this year than the four hikes most economists are expecting.

Higher inflation has been squeezing businesses and consumers, and the Fed is expected to combat it in 2022 by raising interest rates. Investors fear that the Fed could either be moving too late or could be too aggressive.

The pandemic still hovers over the economy, threatening to crimp progress with every new wave of infections.

In China, reported local COVID-19 cases have dropped but some people are wary of infections spreading with next week’s Lunar New Year holiday and the Beijing Winter Olympics, which begin Feb. 4.

The International Monetary Fund cited the omicron variant as the reason it has downgraded its forecast for global economic growth this year.

That is “consistent with disrupted and dampened recovery out of the pandemic,” Mizuho Bank said in a report. “Rolling supply-chain kinks, troubling escalation and broadening of inflation, and stuttered re-opening due to the omicron variant of (COVID) are in the line-up of ‘usual suspects’ for the dimmer recovery in 2022,” it said.

In energy trading, benchmark U.S. crude added 20 cents to $85.80 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.29 to $85.60 a barrel on Tuesday.

Brent crude, the basis for pricing international oil, picked up 29 cents to $88.47 a barrel.

In currency trading, the U.S. dollar rose to 114.10 Japanese yen from 113.87 yen. The euro cost $1.1299, down from $1.1300.

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