Global stocks mixed while bond yields hit 13-month high, as all eyes turn to the Federal Reserve

• Global stocks were mixed as investors awaited the Federal Reserve's interest rate decision.
• Bond yields ticked higher, with the Fed expected to keep policy on hold, but raise its economic forecasts.
• Rising bond yields have unnerved investors in recent weeks and triggered a move out of tech stocks.

Global stocks were mixed on Wednesday morning as investors nervously awaited a Federal Reserve interest rate decision, while a key US bond yield hit a 13-month high.

S&P 500 futures slipped 0.07%, while Dow Jones futures climbed 0.05%. Futures for the tech-heavy Nasdaq 100 index fell 0.29%.

Overnight in Asia, China's CSI 300 rose 0.42% while Japan's Nikkei was roughly flat. The pan-European Stoxx 600 index fell 0.34% in morning trading and the UK's FTSE 100 slipped 0.26%.

Investors are "understandably reluctant to drive asset prices sharply one way or the other" with a key Fed meeting "looming large," said Chris Scicluna of Daiwa Capital Markets.

It's been a volatile start to the year for the stock markets, with investors rotating out of fast-growing tech stocks into companies that stand to benefit from the reopening of economies after coronavirus, such as banks and energy firms.

Rising bond yields - in response to stronger growth and inflation expectations - have made expensive tech stocks look less attractive, triggering some sharp falls in the US's Nasdaq index.

The yield on the key US 10-year Treasury note rose to 1.644% on Wednesday ahead of the Fed decision before retreating to 1.641%. That was its highest since early February 2020, up from around 0.92% at the start of the year.

One reason for the sharp rise is some investors think the Fed will cut back on economic support sooner than expected, if growth and inflation pick up as predicted.

The market is therefore eagerly awaiting Wednesday's Fed meeting. The central bank is expected to increase its growth predictions and leave interest rates and bond-buying unchanged, but investors hope to hear more detail about the likely path of US monetary policy.

Fed Chair Jerome Powell has already pushed back, saying in early March: "We're still a long way from our goals of maximum employment and inflation averaging 2% over time."

Aaron Anderson, senior vice president of research at Fisher Investments, said: "The question is whether investors believe the Fed will keep its promises."

"The recent move higher in rates may indicate the Fed has a credibility problem. Today, markets will be looking for any signal that the Fed is wavering from its course," he said.

The dollar index was little changed at 91.88. Oil prices edged lower, with Brent crude falling 0.83% to $67.79 a barrel and WTI down 0.62% to $64.40 a barrel.

In Europe, Volkswagen shares jumped 7.4% after the company revealed ambitious new goals for the production of electric vehicles.

Bitcoin was down around 1% to $55,050, well off a record high of close to $62,000 at the weekend, with investors choosing to take some profits.