Wall Street follows global markets higher and oil retreats despite new barrage out of Iran

U.S. benchmark crude fell $1.24 to $94.53 per barrel. Brent crude, the international standard, rose 75 cents to $104.17 per barrel. That's down from more than $106 on Monday.

With higher oil prices feeding into other inflation, the Fed is widely expected to keep rates on hold Wednesday.

The Fed will also release a set of quarterly projections, which could result in the central bank trimming its forecast of one rate cut this year, to zero. Though seemingly a minor adjustment, it would be a major course correction after 18 months of on-again, off-again rate cuts.

The Iran war has made it a particularly difficult time for policymakers to issue economic projections. Gas prices are soaring and will push up inflation for at least the next month or two. The average price for a gallon of gasoline spiked again overnight, reaching $3.84. A gallon of gas last month, before the U.S. and Israel attacked Iran, was well under $3.

Many economists expect the Fed will forecast that inflation will remain as high as 3% even by late 2026, well above its December projection of 2.6%. An increase of that magnitude could be hard to square with more interest rate cuts.

Iran lashed out Wednesday with multiple attacks on its Gulf neighbors and Israel following the killing of one of its top leaders in an airstrike. Iran's missiles evaded air defenses, killing two near Tel Aviv.

Global oil flows remain largely constrained, ING Bank analysts Warren Patterson and Ewa Manthey wrote in a research note on Wednesday, even as hopes were growing that Iran might be allowing more vessels through the Strait of Hormuz, a key waterway for global oil and gas transport.

Roughly a fifth of the world’s crude oil passes through the strait, which has been largely closed as Iran blocks ships linked to the U.S., Israel and their allies.

In equities trading, Macy's jumped about 7% after the department store reported stronger-than-expected profits in the crucial fourth-quarter as comparable sales rose again. The department store said an overhaul of its merchandise and improved customer service led to more spending by shoppers.

In Europe, Germany's DAX rose 0.9%, the CAC 40 in Paris picked up 1.1% and Britain's FTSE 100 edged 0.2% higher.

During Asian trading, Tokyo's Nikkei 225 gained 2.9% to 55,239.40 after the government reported exports were higher than expected in February.

In South Korea, the Kospi jumped 5% to 5,925.03.

Lower oil prices are a boon for big oil importers like Japan and South Korea.

Hong Kong’s Hang Seng reversed early losses, surging 0.6% to 26,025.42, while the Shanghai Composite index also rebounded, gaining 0.3% to 4,062.98.

Australia’s S&P/ASX 200 climbed 0.3% to 8,640.60.

Taiwan’s Taiex added 1.5% and India's Sensex advanced 1%.