US equity markets are trading in a narrow range as investors adopt a cautious stance ahead of the Federal Reserve's interest rate decision on Wednesday.
The DAX is also showing signs of weakness, reflecting broader global uncertainty.
Financial markets are pricing in a non-trivial probability of a Federal Reserve rate hike this week, creating a stark disconnect with the consensus view among economists who expect the central bank to hold interest rates steady.
This divergence highlights the market's sensitivity to recent data and policy signals, despite the lack of explicit guidance for a tightening move.
The uncertainty surrounding whether the central bank will raise rates is compounded by geopolitical risks, particularly the ongoing crisis in the Middle East.
These external factors are adding to the volatility, making it difficult for investors to gauge the immediate direction of asset prices.