Global markets moved cautiously on Wednesday as investors awaited the United States Federal Reserve’s interest rate decision, a ruling expected to shape the final weeks of the trading year.

On Wall Street, stocks delivered a mixed performance, reflecting uncertainty over the Fed’s next steps and how aggressively it may move to support growth into 2026. Some sectors showed early strength, while others softened as traders positioned themselves for potential volatility.

In London, sentiment proved slightly more upbeat.

The FTSE 100 edged higher, supported by gains across banking and media stocks, while mid-cap shares were more muted.

Investors in the UK appeared encouraged by expectations of a near-term shift in US monetary policy, which could ease global financial conditions and strengthen risk appetite.

Traders on both sides of the Atlantic are now focused on whether the Federal Reserve will signal a broader easing cycle or a more cautious, data-dependent approach.

Markets have largely priced in a reduction in borrowing costs, but the outlook for 2026 remains uncertain, shaped by mixed economic data and lingering concerns about inflation.

Analysts warn that even a modest rate cut could spark short-term swings, particularly in US equities that have rallied strongly in recent weeks.

For now, both Wall Street and London remain in a holding pattern, awaiting guidance that could redefine market sentiment as the year draws to a close.