April 29 (Reuters) - What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

Today marks the apex of a packed week of events, with the Federal Reserve's interest rate decision and earnings reports from four of the U.S. mega-caps. Perhaps unsurprisingly, there's been some cooling of red-hot stock markets in advance, not least in the supercharged tech and chip space.

That tech retreat was partly triggered by a report that OpenAI had missed some of its internal targets for user growth, calling into question the seemingly boundless optimism around AI demand.

I'll get into that and more below.

But first, check out my latest column on why a narrowing transatlantic rate gap may be a mirage.

And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

WHIRLWIND WEDNESDAY

OpenAI pushed back on the report about missed targets, but its central role in the tech transformation - and its cross-deals with major AI firms - meant the jitters were enough to knock back other stocks, including Oracle and CoreWeave.

All major U.S. indexes closed down on Tuesday and futures were steady before the bell on Wednesday, while Asian markets edged up and European shares rose after the open.

As to the Fed meeting, the stasis in the Iran conflict - which appears to be going nowhere right now - has caused energy prices to edge higher and sent market inflation expectations over the next year or two to six-month highs. No change in rates is expected today. Powell's guidance is likely to lean hawkish, though it may pack less of a punch than it did over the past eight years.

Markets see less than a 20% chance of another rate cut this year, and March inflation figures due out on Thursday are expected to rise.

Meantime, a worrying rise in household inflation expectations in the euro zone should lead to a more hawkish tilt from the European Central Bank, which meets tomorrow.

Elsewhere, energy markets were digesting Tuesday's surprise decision by the UAE to leave OPEC after more than 50 years. The move is expected to undermine the cartel's influence over prices in the longer term, and the UAE is likely to ramp up production once the Iran conflict is over.

But with Gulf oil markets largely frozen thanks to the Iran conflict, there was no immediate crude price reaction, though long-dated futures slipped slightly.

More relevant right now is the continued disruption in the Strait of Hormuz, with Brent and WTI crude spiking on Wednesday to as high as $115 and $103 per barrel, respectively. That was partly on a WSJ report that President Trump has instructed aides to prepare for an extended blockade of Iran.

Chart of the day

The UAE was in February OPEC's fourth-largest producer after Saudi Arabia, Iran and Iraq - accounting for about 12% of total output, according to the International Energy Agency. The UAE has a capacity of around 4.85 million barrels per day and aims to lift that to 5 million bpd by 2027 - ambitions that sat uneasily with OPEC's ongoing output curbs.

Today's events to watch

* U.S. Federal Reserve interest rate decision (2 p.m. EDT) and news conference with Chair Jerome Powell (2:30 p.m. EDT)

* Bank of Canada interest rate decision (9:45 a.m. EDT)

* U.S. corporate earnings: Alphabet, Microsoft, Amazon, Meta, Qualcomm

Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.