The Dow Jones index gave up 0.09%, the Nasdaq, dominated by technology, gave up 0.12% and the S&P 500 0.05%, around 4:15 GMT.

Refreshed Tuesday by a rebound in banking stocks, the Dow Jones index had advanced by 0.98% to 32,560.60 points, the Nasdaq had climbed by 1.58% to 11,860.11 points and the S&P 500 by 1.30% to 4,002.87 points.

The Federal Reserve is walking a tightrope, torn between the imperative to raise interest rates to combat stubborn inflation and the temptation to curb these hikes to avoid further banking upheavals.

"All eyes in the financial and economic world will be on the Federal Reserve today as Chairman Jerome Powell tries to balance his fight against inflation with the sudden banking crisis," said Art Hogan of B. Riley Wealth Management.

The analyst noted that the latest data on inflation - which still stood at 6% in February according to the CPI index - "argues for a continued tightening" of credit conditions. At the same time, the preservation of financial stability suggests "that a pause could be prudent".

Still, more than 85% of markets expect the Fed's Monetary Committee to adopt a 25 basis point hike, according to calculations by CME based on futures products. This would take them to between 4.75% and 5%.

In the bond market, yields on ten-year Treasuries stood at 3.61% as the previous day.

"The market is not afraid of this rate hike because it also thinks it will be one of the last Fed hikes before the possibility of at least two cuts in the second half of the year," said Patrick O'Hare of Briefing.com.

According to him, the most decisive for the market will be the press conference of the head of the Fed at 18:30 GMT.

"Reporters will want to know why the Fed missed the implosion of SVB Financial and to what extent the central bank thinks banking turmoil can be a problem for the economy," O'Hare said.

Investors will also focus on the Fed's economic forecasts and the rate projections that each member of the committee will deliver (the "dot-plot").

The Fed meeting will be followed by that of the Bank of England on Thursday as inflation rose again in February to 10.4% when economists were betting on a decline.

On the equity front, the securities of the US regional banks, which had rebounded strongly the day before, were experiencing mixed fortunes. Thus First Republic dropped 2.79% and PacWest Bancorp gave up 3.77% while Western Alliance Bancorporation gained 7.47%.

The highly volatile stock and mascot of small carriers GameStop was the star of the day, swelling 35% to $ 23.80.

The video game distributor made its first profit in two years in the fourth quarter, but much more because of cuts in its operating costs than because of the health of its sales, which are declining.

The company specializing in space launches for small satellites Virgin Orbit, in difficulty a few months after the failure of a major operation, soared 50% to 66 cents.

The company, whose operations had been put on "pause" by British billionaire Richard Branson last week "in order to keep its capital", plans to resume its activity Thursday.

© 2023 AFP