HONG KONG, CHINA — Stocks mostly rose Wednesday, rebounding from an early sell-off thanks to earnings from top US tech giants that eased concerns about consumer demand.

The reports from Wall Street titans including Microsoft and Alphabet helped soothe anxiety ahead of an expected Federal Reserve interest rate hike.

The day started slowly following a steep drop on Wall Street fuelled by concerns that four-decade high inflation and rising borrowing costs were keeping Americans from spending, and pushing the economy towards a recession.

That was backed up by a profit warning by retail titan Walmart and a closely watched consumer confidence gauge sinking for the third month in a row, while the International Monetary Fund slashed its global growth forecasts.

Still, US futures rallied — helping drag much of Asia — after earnings releases from Microsoft and Texas Instruments provided upbeat forecasts, while Google parent Alphabet recorded better-than-expected revenues.

The reports gave a much-needed boost to investors ahead of announcements by Apple, Amazon and Intel.

Dan Morgan, at Synovus Trust, said Alphabet’s results would allow for “a sigh of relief”.

“You’re looking at an environment where the overall ad spend rates are definitely slowing down, yet Google still was able to deliver above and beyond.”

Tokyo, Sydney, Seoul, Singapore, Mumbai, Taipei, Manila, Jakarta and Bangkok all rose, while London, Paris and Frankfurt advanced in the morning.

But Hong Kong and Shanghai dropped after enjoying big gains Tuesday.

While equities are enjoying a broadly positive day, there remains a lot of caution about the outlook for markets.

There had been hope that a recent rally across markets indicated the long-running sell-off may have come to an end, and that signs of an economic slowdown could allow the Fed to ease off its tightening by next year and start cutting rates in 2023.

But observers warned there was still a lot of volatility to come as the bank was still hiking, prices were soaring, Russia’s war in Ukraine showed no sign of ending and China was still battling Covid with lockdowns.

“The Fed hasn’t even gotten to neutral yet,” Jason England, of Janus Henderson Investors, told Bloomberg Television.

“For them to start easing already or for them to start seeing eases priced in is, I think, a little premature.”

Oil on the rise 

All eyes are now on the Fed meeting later in the day, which is followed Thursday by second-quarter economic growth figures.

Officials are widely tipped to announce a second successive three-quarter point increase but the main focus will be their outlook for the economy and clues about future moves as it begins to falter.

“Markets are pricing at a slower pace of tightening before the Fed pivots to an easing stance in 2023,” said SPI Asset Management’s Stephen Innes.

“However, Fed Chair Jerome Powell has been pushing back against a recession outcome while highlighting an outsized focus on combating inflation.”

And CMC Markets analyst Michael Hewson added: “Anyone thinking that in light of recent data that the Fed is likely to soften its tone is probably going to be disappointed.

“The last thing the Fed wants to do now is to allow the market to think it’s about to embark on a dovish pivot, despite increasing evidence that the economy is slowing.”

Oil prices edged up as recession worries were offset by data showing a big drop in US stockpiles, which pointed to strong demand at a time when supplies remain weak.

Key figures at around 0810 GMT 

Tokyo – Nikkei 225: UP 0.2 percent at 27,715.75 (close)

Hong Kong – Hang Seng Index: DOWN 1.1 percent at 20,670.04 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,275.76 (close)

London – FTSE 100: UP 0.4 percent at 7,338.70

Euro/dollar: UP at $1.0138 from $1.0126 Tuesday

Pound/dollar: UP at $1.2058 from $1.2030

Euro/pound: DOWN at 84.08 pence from 84.09 pence

Dollar/yen: DOWN at 136.89 yen from 136.95 yen

West Texas Intermediate: UP 1.3 percent at $96.19 per barrel

Brent North Sea crude: UP 0.9 percent at $105.38 per barrel

New York – Dow: DOWN 0.7 percent at 31,761.54 (close)

— Bloomberg News contributed to this story —