Portugal Colonial - Stock markets mixed ahead of Fed rate decision

Fresh data showing US inflation slowed further last month has raised expectations that the central bank will hold its rate steady after 10 straight hikes.

The Dow Jones Industrial Average, however, opened in the red after a six-day winning streak.

The tech-heavy Nasdaq was up and the broad-based S&P 500 neared the 4,400-point mark it last hit in April 2021.

In Europe, Germany's benchmark DAX index leapt to a record 16,332.67 points before paring down some gains while the Paris CAC 40 also jumped.

London's FTSE 100 climbed as official data showed the UK economy rebounded in April on buoyant consumer spending after a March contraction.

"The expected (Fed) 'skip' this month has provided a tailwind for markets," said Victoria Scholar, head of investment at online trading firm Interactive Investor.

Traders were pricing in a "near-certainty" that the Fed will maintain its rates in a target range between 5.0-5.25 percent after a hiking cycle begun in March last year, she added.

Data on Tuesday showing a sharp drop in the US consumer price index was slightly more than forecast and followed a string of recent readings that suggested 15 months of central bank tightening were beginning to kick in.

It also came after a mixed jobs report earlier this month that showed the labour market remained resilient.

The 4.0 percent annual rise in the Consumer Price Index reading marks the lowest increase since March 2021, albeit still double the Fed's target.

If the Fed and its chairman, Jerome Powell, "live up to the stock market's expectations, then there should be little reaction to the news itself since none of it will truly be a surprise," said Briefing.com analyst Patrick O'Hare.

But he added that markets could fall given that they had been rallying already leading into Wednesday's decision.

"The depth and tone of the selling, though, should be proportional to the news itself," he said.

"If everything lines up as expected, then it is apt to be relatively modest and orderly. If there is, in fact, a hawkish surprise, then the selling should look more frenetic."

Investors worry that further rate hikes could tip the US economy into recession.

In Asia, Hong Kong and Shanghai stocks struggled as investors kept tabs on China with speculation swirling that leaders would unveil a batch of measures to support the world's number two economy.

- Key figures around 1345 GMT -

New York - Dow: DOWN 0.4 percent at 34,074.29 points

London - FTSE 100: UP 0.3 percent at 7,615.55

Frankfurt - DAX: UP 0.5 percent at 16,308.07

Paris - CAC 40: UP 0.7 percent at 7,343.18

EURO STOXX 50: UP 0.7 percent at 4,376.21

Tokyo - Nikkei 225: UP 1.5 percent at 33,502.42 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 19,408.42 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,228.99 (close)

Euro/dollar: UP at $1.0833 from $1.0796 on Tuesday

Pound/dollar: UP at $1.2677 from $1.2612

Dollar/yen: DOWN at 139.68 yen from 140.17 yen

Euro/pound: DOWN at 85.45 percent from 85.58 pence

Brent North Sea crude: UP 1.1 percent at $75.10 per barrel

West Texas Intermediate: UP 1.0 percent at $70.15 per barrel

burs-cw/lth

M.Carneiro--PC