By STAN CHOE | AS­SO­CI­AT­ED PRESS

NEW YORK (AP) — U.S. stocks are ral­ly­ing Wednes­day, on track for their first gain in six days, but more tur­bu­lence may be ahead when the Fed­er­al Re­serve an­nounces in the af­ter­noon how sharply it’s rais­ing in­ter­est rates.

The S&P 500 was 0.9% high­er as in­vestors ready for the Fed’s rate hike, which most in­vestors ex­pect to be triple the usu­al amount and the sharpest since 1994. The Dow Jones In­dus­tri­al Av­er­age was up 208 points, or 0.7%, at 30,574, as of 11:04 a.m. East­ern time, and the Nas­daq com­pos­ite was 1.5% high­er.

In­vest­ments around the world, from bonds to bit­coin, have tum­bled this year as high in­fla­tion forces the Fed­er­al Re­serve and oth­er cen­tral banks to swift­ly re­move sup­ports propped un­der­neath mar­kets ear­ly in the pan­dem­ic. The fear is that too-ag­gres­sive hikes in in­ter­est rates will force the econ­o­my in­to a re­ces­sion.

Even if cen­tral banks pull off the del­i­cate trick of slow­ing the econ­o­my just enough to stamp out in­fla­tion, with­out a re­ces­sion, high­er in­ter­est rates push down on prices for in­vest­ments re­gard­less. The hard­est-hit have been the in­vest­ments that soared the most in the easy-mon­ey era of ul­tralow in­ter­est rates, in­clud­ing high-growth tech­nol­o­gy stocks and cryp­tocur­ren­cies.

Trea­sury yields have shot to their high­est lev­els in more than a decade on ex­pec­ta­tions for a more ag­gres­sive Fed, though they eased on Wednes­day. A dis­ap­point­ing re­port show­ing that sales at U.S. re­tail­ers un­ex­pect­ed­ly slumped in May from April con­tributed. So did a weak­er-than-ex­pect­ed re­port on man­u­fac­tur­ing in New York state.

The econ­o­my is still large­ly hold­ing up amid a red-hot job mar­ket, but it has shown some signs of dis­tress re­cent­ly. A pre­lim­i­nary read­ing on con­sumer sen­ti­ment last week, for ex­am­ple, sank to its low­est read­ing on record due in large part to high gaso­line prices.

The yield on the 10-year Trea­sury pulled back to 3.41% from 3.48% late Tues­day. The two-year Trea­sury, which more close­ly fol­lows ex­pec­ta­tions of Fed ac­tion, fell to 3.34% from 3.45%.

Cryp­tocur­ren­cy prices con­tin­ued to sink, and bit­coin dropped as low as $20.087.90, near­ly 71% be­low its record of $68,990.90 set late last year. It was down near­ly 4% at $21,293 in morn­ing trad­ing, ac­cord­ing to Coin­Desk.

Its tum­ble has wors­ened as in­vestors ramp up their ex­pec­ta­tions for how ag­gres­sive­ly the Fed will move on in­ter­est rates.

A week ago, vir­tu­al­ly no one was ex­pect­ing a hike of three-quar­ters of a per­cent­age point, which is the wide­spread ex­pec­ta­tion for this af­ter­noon. But a stun­ning re­port on Fri­day brought up­heaval to mar­kets when it showed in­fla­tion at the con­sumer lev­el un­ex­pect­ed­ly ac­cel­er­at­ed last month.

It dashed hopes on Wall Street that in­fla­tion may have al­ready peaked, and the da­ta seem­ing­ly pinned the Fed­er­al Re­serve in­to hav­ing to get more ag­gres­sive. The Fed has got­ten crit­i­cism for mov­ing too slow­ly ear­li­er to rein in in­fla­tion. Oth­er cen­tral banks around the world are al­so rais­ing in­ter­est rates, adding to the pres­sure.

Japan’s cen­tral bank has kept rates near record lows. That has caused the yen to fall to two-decade lows against the U.S. dol­lar as traders shift cap­i­tal in search of high­er re­turns.

The war in Ukraine has helped send prices for oil soar­ing be­cause the re­gion is a ma­jor pro­duc­er of en­er­gy. COVID in­fec­tions in Chi­na, mean­while, have led to the clo­sure of fac­to­ries and dis­rupt­ed sup­ply chains.

It all helped pull the S&P 500 down more than 20% from its record set in ear­ly Jan­u­ary, putting Wall Street in­to what in­vestors call a bear mar­ket.

Mar­kets were more re­laxed Wednes­day, with stocks climb­ing across Eu­rope and some of Asia.

Ger­many’s DAX re­turned 1.7%, and the French CAC 40 rose 1.7% af­ter the Eu­ro­pean Cen­tral Bank called an un­sched­uled meet­ing to ad­dress wor­ries that ris­ing in­ter­est rates will cause tur­moil in the con­ti­nent’s bond mar­ket. The cen­tral bank did not give a de­tailed plan, but it said it would act if need­ed against “frag­men­ta­tion” as yields for some Eu­ro­pean coun­tries’ bonds rise much more than for oth­ers.

Stocks in Shang­hai gained 0.5% af­ter gov­ern­ment da­ta showed Chi­nese fac­to­ry ac­tiv­i­ty re­bound­ed in May as an­ti-virus con­trols that shut down busi­ness­es in Shang­hai and oth­er in­dus­tri­al cen­tres eased. Stocks in Seoul and Tokyo, though, fell more than 1%.

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AP Busi­ness Writer Joe Mc­Don­ald con­tributed.