GLOBAL MARKETS-Stocks inch up, dollar declines as investors prepare for Fed

By Caroline Valetkevitch and Amanda Cooper

NEW YORK/LONDON, Dec 10 (Reuters) - Major stock indexes mostly edged higher while the dollar dipped on Wednesday as crunch time neared for a divided Federal Reserve policy board.

Investors were also anxious to see earnings results from Oracle ORCL.O after Wall Street's closing bell. That and other results could test sky-high artificial intelligence valuations.

The Fed is widely expected to cut interest rates when it gives its decision at 2 p.m. ET (1900 GMT), but investors are anxious about the rate outlook for next year.

Much will depend on how many "dot plot" forecasts from Fed members see one, two or no more cuts next year. Analysts also suspect at least two of the 12 voters could dissent against an easing, putting Chair Jerome Powell in a difficult position.

Policymakers have been weighing signs of a cooling labor market against concerns about inflation risks. Recently, investors have been paring expectations of rate cuts in 2026.

Complicating matters further is the lack of data due to the government shutdown, which is going to delay the all-important November payrolls report to December 16, while inflation figures are due two days later.

"The Fed is running semi-blind at this meeting because they don't have the full picture just yet on the economy," said Eugene Epstein, head of trading and structured products at Moneycorp in New Jersey.

Markets are pricing in a roughly 90% chance of a 25 basis point cut, according to CME's FedWatch Tool, with many market participants anticipating a "hawkish cut," in which the Fed may indicate it plans to slow or halt the path of rate reductions.

On Wall Street, shares of Oracle were down 0.8%, while the S&P 500 edged higher.

The Dow Jones Industrial Average .DJI rose 215.76 points, or 0.45%, to 47,776.05, the S&P 500 .SPX rose 2.69 points, or 0.04%, to 6,843.20 and the Nasdaq Composite .IXIC fell 66.29 points, or 0.28%, to 23,510.20.

Seasonally, December is one of the months of weaker performance for the S&P 500, except for the final two weeks, when stocks tend to rise into year-end, known as the Santa rally, as investors square their books for the year.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 1.18 points, or 0.12%, to 1,007.62.

The pan-European STOXX 600 .STOXX index rose 0.07%.

Gold prices XAU= edged down, while spot silver XAG= rose 0.6% to $61/oz after hitting an all-time high of $61.61 earlier in the session.

The price of silver has more than doubled this year as inventories dwindled and a bullish trend drew demand from momentum funds.

There is also rising demand from sectors including solar energy, electric vehicles and their infrastructure, and data centers and AI, the Silver Institute industry association said in a research report.

U.S. Treasury yields slipped ahead of the Fed announcement. The yield on benchmark U.S. 10-year notes US10YT=RR fell 2.5 basis points to 4.161%, from 4.186% late on Tuesday.

Yields around the globe have been climbing in recent weeks, as many central banks have signaled they are either at or near the end of their own easing cycles, while the Bank of Japan is widely anticipated to hike rates at its policy meeting next week.

The dollar erased two days of gains as investors pared positions in anticipation of a Fed rate cut. The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.25% to 98.97, with the euro EUR= up 0.23% at $1.1652. Against the Japanese yen JPY=, the dollar weakened 0.37% to 156.28.