London (AFP) - Stock markets mostly dropped on Tuesday as investors awaited a US Federal Reserve interest-rate decision for signs of the outlook for the tariffs-hit economy.

Oil prices staged a comeback after tanking on news of an output hike by key OPEC+ producers that came despite growing concerns over a slowdown in the global economy, which could hit demand.

Wall Street’s main three indices were lower in midday trading.

“Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve’s FOMC meeting, which kicks off today,” said David Morrison, senior market analyst Trade Nation.

The US Federal Reserve is expected to hold interest rates steady on Wednesday, even as President Donald Trump pushes for more cuts.

While data last week showed the US economy contracted in the first quarter, strong jobs and services sector figures suggest there is still some resilience.

“It’s a big week for central bank interest rate decisions,” noted AJ Bell investment director Russ Mould.

“The key focus will be on forward-looking commentary and whether the Fed is getting worried about Trump’s tariffs,” Mould added.

The US dollar was lower against major rival currencies.

On Thursday, the Bank of England is expected to cut its key rate by a quarter point to 4.25 percent amid concerns of weak growth in Britain.

In Europe, Frankfurt’s stock market shed 0.4 percent after German conservative leader Friedrich Merz was confirmed as chancellor following an initial setback.

Paris also ended the day down 0.4 percent while London finished flat.

In Asia, stock markets benefited from some renewed optimism that governments are making progress in agreements to temper Trump’s levies, which have roiled global markets in recent months.

US Treasury Secretary Scott Bessent told CNBC that the Trump administration had been approached by 17 countries and offered “very good” trade proposals.

He also said there could be “substantial progress in the coming weeks” with China, which has been hit with tariffs of 145 percent.

Hong Kong and Shanghai stock markets closed higher as investors returned from a long weekend.

Oil prices rose around four percent, clawing back Monday’s losses that came after Saudi Arabia, Russia and six other members of the OPEC+ cartel agreed to boost output by 411,000 barrels a day in June.

The move came a month after a similar announcement that caused prices to fall.

In company news, US food delivery service DoorDash agreed to buy Deliveroo in a £2.9-billion ($3.9-billion) deal that values the UK group at less than half of its initial public offering price.

Shares in Deliveroo rose 2.1 percent on London’s second-tier FTSE 250 index, while DoorDash shares dropped 7.4 percent in New York.

Danish wind turbine maker Vestas jumped nine percent in Copenhagen after it stuck to its annual earnings forecasts despite geopolitical uncertainty and US tariffs.

- Key figures at around 1530 GMT -

New York - Dow: DOWN 0.4 percent at 41,074.41 points

New York - S&P 500: DOWN 0.3 percent at 5,633.98

New York - Nasdaq Composite: DOWN 0.4 percent at 17,768.00

London - FTSE 100: FLAT at 8,597.42 (close)

Paris - CAC 40: DOWN 0.4 percent at 7,696.92 (close)

Frankfurt - DAX: DOWN 0.4 percent at 23,249.65 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 22,662.71 (close)

Shanghai - Composite: UP 1.1 percent at 3,316.11 (close)

Tokyo - Nikkei 225: Closed for holiday

Euro/dollar: UP at $1.1349 from $1.1319 on Monday

Pound/dollar: UP at $1.3370 from $1.3296

Dollar/yen: DOWN at 142.83 yen from 143.72

Euro/pound: DOWN at 84.87 pence from 85.10

Brent North Sea Crude: UP 4.0 percent at $62.63 per barrel

West Texas Intermediate: UP 4.3 percent at $59.61 per barrel

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