LONDON - World stocks held on to most of their recent gains on Wednesday and oil prices rose on news of a forthcoming meeting between top US and Chinese trade officials.

But the dollar was down for a fourth session and European stocks dropped as caution prevailed about prospects for any tariff deal ahead of a Federal Reserve decision on rates.

US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's top economic official for talks that could yield the first step in resolving a trade war disrupting the global economy.

"My sense is this will be about de-escalation," Bessent said of the meeting, set for the weekend in Switzerland.

The US Federal Reserve meets to set interest rates later in the day, with markets implying nearly no chance of a change.

While US stock futures rose with those tied to the benchmark S&P 500 up 0.6 percent, Europe's STOXX 600 and Britain's FTSE 100 indexes were both down about 0.3 percent.

The dollar was down 0.1 percent against a basket of currencies, falling for the fourth session in a row.

"Most markets outside the United States have shrugged off those headlines in relatively short order, especially given that hopes for any significant progress to be made over the weekend remain very slim," said Michael Brown, a senior strategist at broker Pepperstone.

"I think what we're really seeing ... is just the classic indecisiveness that often takes hold ahead of an FOMC meeting," he added, referring to the US central bank.

Tiptoeing higher for weeks, world stocks have largely recouped their losses since the "Liberation Day" tariff announcements in anticipation of some kind of rapprochement or breakthrough to cut the levies.

But the dollar, which took a beating, is still more than 4 percent lower than at the end of March.

Later in the session, all focus will be on the Fed, which meets for the first time since the US tariff news, starting with reciprocal measures on April 2, whipsawed financial markets.

"The meeting will likely shape expectations more than usual," said Commerzbank strategist Erik Liem.

Fears that President Donald Trump could fire Fed Chair Jerome Powell had also hurt US markets last month.

"Another possible source of support for the dollar is today's (Fed) meeting ... if Chair Powell strikes a hawkish tone to assert his independence from political influence," analysts at the Commonwealth Bank of Australia said in a note.

While a hold on Wednesday is the consensus, markets only see around a 30 percent chance of a cut in June, down from about 60 percent before last week's strong labour market data.

Elsewhere, the euro was steady above $1.136 after German conservative leader Friedrich Merz was elected chancellor in a second round of voting on Tuesday, after a shock defeat in the first attempt.

In commodity markets, Brent crude futures was up 1.3 percent at $62.95, but remains down some 15 percent since the end of March.

Gold was down 1.3 percent on Wednesday, sitting more than $100 an ounce below last month's record high.

In Asia, India's rupee fell a little and stocks in Pakistan slumped after the heaviest fighting in decades erupted between the nuclear-armed neighbours.

China announced a rate cut, more cash for the banking system and expanded a channel for insurance money to flow into stocks, though reaction was muted as investors await fiscal stimulus and all eyes are on the US-China talks.

A sizzling rally in Asian currencies cooled, with Korea's won down sharply and the rate cut weighing on China's yuan.