Global Stocks Waver, Investors Wary Ahead of Fed Meeting – Wall Street Journal

Updated Sept. 15, 2015 7:18 a.m. ET

Global stocks struggled for direction Tuesday amid investors' lasting concerns over China and caution ahead of a U.S. interest-rate decision.

U.S. futures pointed to a flat opening for the Dow Jones Industrial Average and a 0.1% gain for the S&P 500. Changes in futures aren't necessarily reflected in moves after the opening bell.

The Stoxx Europe 600 oscillated and was recently 0.3% higher. In Asia, the Shanghai Composite Index closed down 3.5%. Australia's S&P/ASX 200 fell more than 1.5% and the Hang Seng HSNGY -0.85 % Index slipped 0.5%.

Japan's Nikkei Stock Average pared early strong gains after the Bank of Japan 8301 -0.43 % announced at a policy meeting that it would refrain from additional easing steps. It ended the session 0.3% higher.

Investors said they were wary of placing big bets before a two-day meeting of the U.S. Federal Reserve, slated to start on Wednesday, that could lead to the first interest-rate increase in almost a decade.

"There is a lot of uncertainty around the decision and for the large part the market is just willing the decision and that uncertainty to be over," said John Bilton, global head of multiasset strategy at J.P. Morgan Asset Management, which manages around $ 1.8 trillion globally.

He said that this week "investors are largely sitting on their hands awaiting opportunities that might arise after the decision" and that trade was thinner than usual.

Expectations for an increase at September's meeting have declined in recent weeks amid concerns over China's economic growth, but many say that a move remains possible.

There is still a "compelling case" for the Fed to raise rates this week, strategists at Deutsche Bank DB -0.27 % wrote in a note.

"While some emerging market economies may be vulnerable, global growth prospects, in our view, haven’t weakened enough to significantly affect U.S. economic prospects," they wrote.

Nonetheless, signs of a slowdown in the Chinese economy are keeping investors on edge.

Economic reports out of China over the weekend—factory output and fixed-asset investment—fell short of forecasts, adding to concerns that China could fail to reach its full-year growth target of 7%.

More than 40% of investors now see weak growth in China and elsewhere in emerging markets as the main risk to financial markets over the next 12 months, according to a survey published by Barclays BCS -2.06 % on Tuesday.

"We view recent developments on Chinese markets as a sharp correction rather than the start of a long-term bear market," said Christophe Donay, chief strategist at Pictet Wealth Management.

He added, however, that financial market volatility as a result of what is happening in China would likely last for years to come.

In currency markets, the euro was unchanged against the U.S. dollar at $ 1.1306. The dollar was 0.5% lower against Japan's yen at ¥119.70.

Brent crude was 0.5% higher on the day at $ 48.47 a barrel. Gold was around 0.3% lower at $ 1,104.90 a troy ounce.

The yield on the 10-year U.S. Treasury bond was slightly lower at 2.173%.

Write to Josie Cox at josie.cox@wsj.com