Global stocks tread water after hitting record highs, as all eyes turn to the Federal Reserve

• Global stocks were little changed on Wednesday, as investors awaited a key Fed decision.
• The world's most important central bank is expected to cut back on bond purchases.

Global stocks were little changed on Wednesday as investors awaited the latest Federal Reserve decision, which is likely to see the central bank start cutting back its support for the economy.

Equities rose to record highs the previous day, with the Dow Jones closing above 36,000 for the first time as a solid third-quarter earnings season continued.

On Wednesday, Dow Jones and S&P 500 futures were roughly flat, while Nasdaq 100 futures were up 0.1%.

China's CSI 300 index slipped 0.29% overnight after Beijing said the economy is dealing with new "downward pressures." Japanese markets were closed for a holiday.

Europe's continent-wide Stoxx 600 was roughly flat, while Britain's FTSE 100 eased 0.35%.

The main event on Wednesday is the Federal Reserve's monetary policy decision after a two-day meeting.

Most analysts expect the Fed to announce it will start "tapering" - that is, cutting back on - its $120 billion of bond purchases each month.

The purchases began in early 2020 to calm markets and flood the economy with cash to encourage lending as coronavirus whacked the economy. But policymakers are concerned about strong inflation and think the economy can now manage without so much support.

"Fed officials agree that 'substantial further progress' has been made on both the inflation and employment mandates," said James Knightley, chief international economist at ING, a bank.

"With the [quantitative easing] program having done its job and COVID cases subsiding, it is time to announce a slowing in the rate of asset purchases."

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With most investors assuming the Fed will taper purchases by around $15 billion a month, attention is turning to when the central bank will raise interest rates from zero.

Markets are more divided on the interest rate question, but are currently pricing in an expectation the Fed will raise rates for the first time in June next year, according to CME's Fedwatch tool. Investors will be watching closely for signals about interest rates on Wednesday.

The Bank of England is then expected to be the first major central bank to hike interest rates on Thursday, as it also deals with surging inflation.

Bond markets were placid on Wednesday, with the yield on the 10-year US Treasury note down slightly to 1.523%.

For now, a strong third-quarter earnings season has helped investors look past concerns about central banks withdrawing stimulus and pushed stocks to record highs. Under Armour and Pfizer rose on Tuesday after posting solid results.

Elsewhere in markets, oil prices fell after the US pushed the OPEC+ group of oil-producing countries to increase production ahead of its meeting on Thursday, saying that high energy prices were fuelling inflation.

Brent crude was down 1.64% to $83.32 a barrel on Wednesday, while WTI crude was 1.91% lower at $82.31 a barrel.

Cryptocurrencies continued to ride high, with bitcoin roughly flat at around $63,000 and ether rising to an all-time high of above $4,600.