Stock traders are holding tight in case the Fed 'spoils the party'

Markets were flat on Wednesday as they waited to see if the Federal Reserve would signal its willingness to cut interest rates during its monthly policy update later in the day.

Stocks jumped on Tuesday after Europe's central bank indicated it would cut interest rates and buy up assets to hit inflation targets if economic conditions don't improve.

President Donald Trump accused the bank of manipulating the euro, but raised the prospect of an end to the US-China trade war by tweeting he would meet Chinese President Xi Jinping at the G-20 summit later this month.

View Markets Insider's homepage for more stories.

Stock traders held their breath on Wednesday, keeping markets mostly flat in Europe and the US, as they waited to see if the Federal Reserve would signal its willingness to cut interest rates during its monthly policy update later in the day.

“It's hard to recall a time we headed into an FOMC meeting with so much at stake and with so much uncertainty about what might be agreed and what the guidance for the rest of the year will look like,” said Neil Wilson, chief market analyst for Markets.com.

Stocks soared on Tuesday after the European Central Bank indicated it would cut interest rates and buy up assets to hit inflation targets if economic conditions don't improve. President Donald Trump accused ECB President Mario Draghi of unfairly manipulating the euro with his rhetoric.

However, Trump calmed markets by tweeting that he would meet Chinese President Xi Jinping at the G-20 summit later this month, raising hopes that the pair will strike a deal that avoids further escalation in the US-China trade war.

Now, all eyes are on the Fed.

“There is an air of euphoria and excitement in financial markets that the Federal Reserve will begin preparing investors for lower interest rates in the United States over the second half of the year and potentially into 2020,” said Jameel Ahmad, global head of currency strategy and market research at FXTM.

“But what if Federal Reserve Chair Jerome Powell spoils the party for investors？ It's moments like these where investors can suddenly need to buckle up tightly and prepare for a potentially wild ride.”

Here's the market roundup as of 9.18 a.m. (4.18 a.m. EST):

European equities dipped in morning trading with Germany's DAX down 0.1%, the Euro Stoxx 50 down 0.2%, and Britain's FTSE 100 down 0.3%.

US markets are set for a flat open. Futures underlying the Dow Jones Industrial Average, S&P 500, and Nasdaq were almost unmoved.

Crude oil prices inched upward with West Texas Intermediate crude up 0.3% at $54.30, and Brent crude up 0.4% at $62.40.

Asian stocks jumped on the promise of European stimulus and a US-China trade deal. The Shanghai Composite rose 1%, the SZSE Component climbed 1.4%, Japan's Nikkei leapt 1.8%, and Hong Kong's Hang Seng surged 2.5%.