Wall Street and European stocks rose on Wednesday as markets remained volatile ahead of the results of the Federal Reserve’s latest monetary policy meeting.

The blue-chip S&P 500 rose 1.4%, while the tech-heavy Nasdaq Composite gained 2.1%. optimistic financial forecast From Microsoft to help lift the mood. Shares in the tech group rose 4%.

Europe’s regional Stoxx 600 closed up 1.7%, based on the day beforewhile Britain’s FTSE 100 rose 1.3%.

Global stock markets saw a series of sharp swings as investors grappled with forecasts that the U.S. central bank would raise interest rates for the first time since 2018 to combat soaring inflation. By Tuesday’s close, the S&P 500 was down nearly 9% in January, while the Nasdaq closed about 16% below its all-time high set in November.

The Fed will wrap up its latest meeting on Wednesday, widely expected to issue interest rates rise March. That would mark the two years since the central bank cut its main funds rate to almost zero in response to the economic shock of the pandemic.

But Wednesday’s rally in stocks suggested that some traders now expect the Fed to “relieve concerns about an aggressive tightening cycle,” said Investec strategist Roger Lee.

“Rates have been falling since 2019, so the market has to adjust to a whole new environment, which is inevitably going to be very complicated and difficult. But today it’s hard to imagine the Fed being more hawkish than some of the hawks in the market feared.”

Earlier this month, JPMorgan Chase CEO Jamie Dimon Say There is a “considerable chance” of more than four rate hikes this year, which has been priced in by the futures market, with a possibility of six to seven.

Higher rates don’t just cast a cloud over companies’ ability to borrow and invest. They also lower the present value of companies’ expected future earnings in investor valuation models, and speculative tech stocks have proven particularly vulnerable to monetary policy tightening.

U.S. consumer price inflation hits annual rate A new high in the past 40 years Up 7% last month, price increases widened from areas hit by pandemic-related supply chain bottlenecks to most categories, including food and rent.unemployment has fallen almost to pre-pandemic levels. Labor shortages and record vacancies also boosted wages.

“They have to act,” said Anne Beaudu, co-head of global bond markets at fund manager Amundi. But she added that widespread speculation this week that the Fed signaled a 0.5 percentage point rate hike in March was wrong.

“We don’t think they want to hit the market at the beginning of the process.”

The U.S. Treasury market held steady as bond investors awaited an update from the Federal Reserve on its future buying plans. The yield on the benchmark 10-year Treasury note climbed to 1.78% from about 1.5% late last year.

Asian stock markets were choppy on Wednesday. China’s CSI 300 steered clear of a technical bear market before closing 0.7% higher. In Tokyo, the Nikkei 225 fell 0.4%.