Wall Street pared gains as oil prices tumbled on Wednesday ahead of a widely expected interest rate hike by the Federal Reserve later in the day.

Energy and material stocks were down as crude oil prices fell on fresh evidence of growing global oversupply.

The Fed will announce the outcome of its policy meeting at 7pm, followed by a press conference by chair Janet Yellen.

An increase in the Fed’s benchmark rate from near zero would be the first since June 29th, 2006. After more than a year of posturing and a couple of false starts, the US central bank is expected to raise rates by a token 25 basis points.

Traders see an 81.4 percent chance of a rate hike, according to the CME ’s FedWatch tool.

The Fed is expected to move gradually on subsequent rate hikes after the initial liftoff, according to a Reuters poll. That will help soothe jittery markets, which have been roiled recently by a rout in crude oil prices and a fall in the Chinese yuan.

The rate hike will be a highly symbolic move, coming exactly seven years to the day since the Fed cut rates to zero as the financial crisis engulfed the world.

Since then, the US stock market has staged a spectacular bull-run, with the S&P 500 index more than doubling and the Nasdaq composite index briefly breaching its dotcom boom highs.

“Far and away, the most important takeaway from the Fed meeting is their expectations of the velocity of the rate rise,” said Philip Blancato, chief executive at Ladenberg Thalmann Asset Management in New York.

“I know that they don’t have a crystal ball, but I want to get a better expectation for how quickly they expect to raise rates.”

The Dow Jones industrial average was up 15.9 points, or 0.09 percent, at 17,540.81 in morning trading; the S&P 500 was up 4.66 points, or 0.23 per cent, at 2,048.07 and the Nasdaq Composite index was up 10.36 points, or 0.21 per cent, at 5,005.72.

The Fed has said it would raise rates when it saw a sustained recovery in the economy. While the unemployment rate has fallen to multi-year lows, inflation remains stuck below the Fed’s 2 percent target.

“We expect the start of policy normalization to serve as a catalyst for normalization of the investment environment,” said Mike O’Rourke, chief market strategist at Jones Trading.

The prolonged period of extremely accommodative monetary policy has distorted investment objectives, he said in a note.

- Reuters