By Herbert Lash and Danilo Masoni

NEW YORK/MILAN -A gauge of global equity markets edged higher on Tuesday while 10-year U.S. Treasury yields slid from the 3% level as investors remained cautious, expecting the Federal Reserve to hike rates by the most in a single day since 2000 to curb inflation.

Feeding inflation worries, data showed U.S. job openings hit a record in March as worker shortages persisted. This suggested employers may need to raise wages, which likely would increase consumer prices.

Investors expect the Fed to hike rates by half a percentage point on Wednesday, and to detail plans to reduce its $8.9 trillion balance sheet. The U.S. central bank raised its policy interest rate by 25 basis points in March.

Major stock indices in Europe rose, but Wall Street eked out smaller gains as traders braced for a potentially more aggressive decision by policymakers on Wednesday.

“The Fed’s not going to be worried if eventually these next few rate hikes start to hurt growth and lead to some job losses, because right now the economy is on solid footing,” said Ed Moya, senior market analyst at OANDA.

MSCI’s all-country world index rose 0.39% and the pan-European STOXX 600 index gained 0.53% the day after a “flash crash” in Nordic markets caused by a trade involving a single Citigroup sell order.

The Dow Jones Industrial Average closed up 0.2%, the S&P 500 gained 0.48% and the Nasdaq Composite added 0.22%.

“We could get a dead-cat bounce after the Fed meeting if it’s not more hawkish than what the market has been fearing,” said Jimmy Chang, chief investment officer at the Rockefeller Global Family Office, “but I do think the broader trend is still very cautious on the equity side.”

Nine of the S&P 500’s sectors rose, led by a 2.87% gain in energy, while oil and gas jumped 4.1% in Europe to lead markets there.

Overnight in Asia, Australia’s central bank raised its key rate by a bigger-than-expected 25 basis points, lifting the Aussie dollar as much as 1.3% and hitting local shares.

The Bank of England is expected to raise rates on Thursday for the fourth time in a row.

Asian equities on Tuesday were mostly steady in holiday-thinned trade, with both Chinese and Japanese markets shut. But in Hong Kong, Alibaba shares fell as much as 9% on worries over the status of its billionaire founder Jack Ma.

A state media report that Chinese authorities took action against a person surnamed Ma hit the stock hard, but it recouped losses after the report was revised to make clear it was not the company’s founder.

Germany’s benchmark 10-year Bund yield rose to 1% for the first time since 2015, before retreating as caution set in ahead of the anticipated U.S. and UK rate hikes this week.

The yield on 10-year Treasury notes fell 1.5 basis points to 2.981%, after breaching the key milestone of 3% for the first time since December 2018 on Monday.

The dollar fell against a basket of major currencies as investors weighed how much of the Fed’s expected move to hike rates this week and beyond was already priced in.

The dollar, which has been supported by safe haven buying on worries over the economic outlook, stayed just below the nearly two-decade high reached in April and the euro steadied above the lowest level in more five than years hit last month.

The dollar index fell 0.106%, while the euro rose 0.17% to $1.0522. The Japanese yen was little changed at 130.16 per dollar.

Oil slipped as concerns about demand due to China’s prolonged COVID lockdowns outweighed support from a possible European oil embargo on Russia over the war in Ukraine.

U.S. crude futures settled down $2.76 at $102.41 a barrel, while Brent fell $2.61 to settle at $104.97 a barrel.

Copper and aluminium prices fell sharply as weak manufacturing data on Monday, COVID-19 outbreaks in China and rising rates stoked fears that demand for metals will soften.

Gold firmed, tracking a slight retreat in Treasury yields and the dollar, while investors eyed an aggressive rate hike by the Fed on Wednesday.

U.S. gold futures settled up 0.4% at $1,870.60 per ounce.

Bitcoin fell 2.56% to $37,535.85.

(Reporting by Herbert Lash, additional eporting by Danilo Masoni in Milan; Editing by Alexander Smith, Bernadette Baum and David Gregorio)

By Devik Jain and Echo Wang

(Reuters) – Wall Street stocks ended higher on Tuesday after a choppy session in which each of the major indexes fluctuated between gains and losses as a key meeting of the Federal Reserve got under way.

Investors picked up shares of financials and technology companies ahead of Wednesday’s expected announcement by the Fed.

Nine of the 11 major S&P 500 sectors rose, with energy and financials up 2.9% and 1.3%, respectively. The S&P 500 banks index gained 2%, with Citigroup Inc climbing 2.9%.

The U.S. central bank kicked off its two-day policy meeting on Tuesday. Traders see a 99.9% chance of a 50 basis-point hike on Wednesday, according to CME’s FedWatch Tool https://www.cmegroup.com/tools-information/quikstrike/treasury-watch.html, which would mark the largest rate hike by the Fed since May 2000. [IRPR]

The spotlight stays on Fed Chair Jerome Powell’s news conference on Wednesday for comments on the future path of interest rates and balance-sheet reduction.

“The number one driver of all the market volatility over the last several months has been the Fed and the Fed hawkish rhetoric, so getting an update from them at a Powell press conference (on Wednesday) is a major catalyst and I think the market now is kind of just in waiting mode,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.

In April, Wall Street was hammered by uncertainty around the Fed’s ability to engineer a soft landing for the economy, mixed earnings from some big growth companies, the war in Ukraine and pandemic-related lockdowns in China.

The Nasdaq Composite slumped nearly 13.3% last month, its worst monthly performance since October 2008 as richly valued high-growth stocks came under pressure from rising rates.

The Dow Jones Industrial Average rose 67.29 points, or 0.2%, to 33,128.79, the S&P 500 gained 20.1 points, or 0.48%, to 4,175.48 and the Nasdaq Composite added 27.74 points, or 0.22%, to 12,563.76.

The indexes were boosted by stocks including Apple Inc, Tesla Inc and Exxon Mobil Corp, which rose between 0.7% and 2.1%.

Estee Lauder Cos Inc slumped 5.8% after the cosmetics maker cut its full-year profit forecast due to fresh COVID-19 restrictions in China and the Russia-Ukraine crisis.

Hilton Worldwide Holdings Inc slid 4.2% after the hotel operator forecast a bleak full-year profit.

Western Digital Corp jumped 14.5% as the largest percentage gainer on the S&P 500 after activist investor Elliott Investment Management urged the company to separate its Flash business and offered to invest $1 billion to facilitate a sale or a spin-off of the business.

Volume on U.S. exchanges was 11.35 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored advancers.

The S&P 500 posted 2 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 29 new highs and 195 new lows.

(Reporting by Echo Wang in New York and Devik Jain in Bengaluru; Editing by Anil D’Silva and Matthew Lewis)

By Tiyashi Datta and Jane Lanhee Lee

(Reuters) -Advanced Micro Devices Inc on Tuesday forecast stronger- than-expected full year and second-quarter revenue, with the data center boom boosting demand for its chips, and its shares rose in after-hours trade.

“Each of our businesses grew by a significant double digit

percentage year-over-year, led by EPYC server processor revenue more than doubling for the third straight quarter,” said AMD chief executive Lisa Su in its statement.

The strong outlook and earnings pushed up AMD shares by 3% in after-hours trading.

Worldwide spending on cloud infrastructure services jumped 34% to $55.9 billion in the first quarter, according to data from research firm Canalys, highlighting huge opportunities for companies supplying chips and other hardware to the industry.

Still Summit Insights Group analyst Kinngai Chan called AMD’s second quarter outlook “aggressive” and added there was more downside risk in the PC and graphic card markets.

Graphic card prices have been falling in recent weeks as demand for consumer products that use them have been softening with the lockdown in China and inflation concerns.

On the earnings call with analysts, Su said AMD expected the total PC market to fall by a high single digit this year. “Our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities and expect to continue gaining overall client revenue share,” she said.

The company said it expects revenue of about $6.5 billion, plus or minus $200 million for the current quarter. Analysts on average were expecting revenue of $6.38 billion, according to Refinitiv data. For the full year it forecast $26.3 billion, up about 60%, and ahead of analysts estimates of $25.145 billion according to Refinitiv IBES data.

AMD’s first-quarter revenue came in at $5.89 billion, above analysts’ average estimate of $5.52 billion, according to Refinitiv IBES data. On an adjusted basis, AMD earned $1.13 per share, during the quarter, compared to Street’s estimates of 91 cents per share, according to Refinitiv data.

AMD finalized the acquisition of Xilinx Inc in mid-February. The earnings and forecasts include its results.

(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni, Anil D’Silva, Cynthia Osterman and David Gregorio)