With the Israel-Iran air war entering a sixth day, the G7 wealthy nations struggling to find unity over the conflict in Ukraine, and more signs of fragility in the U.S. economy, the drumbeat of negative headlines offered little respite for investors.
U.S. President Donald Trump's call for Iran's unconditional surrender and comments from him suggesting a more aggressive stance toward Iran have also stoked worries of greater U.S. involvement.
It was again a risk-off tone in markets on Wednesday, with shares in Asia falling and the dollar buoyant.
Stock futures similarly pointed to a mostly lower opening in Europe, though oil prices steadied a little after surging more than 4% in the previous session.
It's an increasingly difficult line for Fed Chair Jerome Powell and his colleagues to tread given the challenging global backdrop, and much attention on the central bank's policy decision will be on its updated Summary of Economic Projections.
For now, markets are still pricing in two Fed cuts by December, but that could very well change should Powell strike a more hawkish tone later in the day.
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