By Richard Leong
NEW YORK (Reuters) - Recovering oil prices helped global stock markets cut losses on Wednesday but investors remained cautious as they awaited clues from the U.S. Federal Reserve on the timing of its next interest rate increase.
Uncertainty ahead of the U.S. central bank's latest policy statement pared some safe-haven bids for gold and U.S. and German government debt.
"We seem to be at the mercy of the oil and commodity markets," said Luke Bartholomew, fixed income manager at Aberdeen Asset Management in London.
U.S. oil futures turned higher after trading down as much as 4 percent, near $30 a barrel. U.S. data showed a jump in weekly demand for products such as heating oil when a cold front hit the country, although analysts said the rise in prices may not last long.
Brent crude in London erased earlier losses, rebounding above $32.
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"Investors have their eyes on oil each day. It's a broader proxy for concerns about the global economy," said Michael Arone, chief investment strategist at State Street Global Advisors' U.S. Intermediary Business in Boston.
Weakening business activity in the United States, China and the rest of world has been evident with the spate of mostly weaker-than-forecast data since the beginning of the year. But it is unclear whether the pullback in U.S. growth is severe enough to derail U.S. policymakers' plan to raise interest rates further in 2016.
The Federal Open Market Committee, the Fed's policy-setting group, is scheduled to release a policy statement at 2 p.m. ET(1900 GMT) after a two-day meeting. [FED/DIARY]
Analysts widely expected the FOMC to leave policy rates unchanged at 0.25-0.50 percent and to perhaps soften its tone on its earlier outlook for four quarter-point rate hikes this year.
Apple and Boeing's disappointing forecasts dragged down U.S. stock indexes, but they recovered from the day's lows.
The Dow Jones industrial average was down 74.37 points, or 0.46 percent, at 16,092.86, the S&P 500 was down 5.64 points, or 0.3 percent, at 1,897.99 and the Nasdaq Composite fell 43.58 points, or 0.95 percent, at 4,524.09.
The pan-European FTSEurofirst 300 index edged down 0.1 percent.
Earlier on Wednesday, Chinese shares <.CSI300> ended stronger, and Tokyo's Nikkei <.N225) finished 2.7 percent higher.
The dollar index, which gauges the greenback against six currencies, was down 0.3 percent at 99.112.
In the bond market, benchmark 10-year Treasury yield rose 3 basis points to 2.024 percent. Its German counterpart edged up about 1 basis point to 0.415 percent.
Traditional safe-haven gold retreated from a 12-week high set Tuesday, last down $4.01 or 0.36 percent, at $1,116.16 an ounce . [GOL/]
(This version of the story refiles with dropped 'r' in Bartholomew in third paragraph)
(Additional reporting by Marc Jones, Amanda Cooper in London; Editing by Catherine Evans and Nick Zieminski)