* MSCI ACWI at 21-month high
* Investors expect Fed to cut rates, focus on policy outlook
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, Oct 30 (Reuters) - A rally in global shares stalled, with Asian markets stuck in tight ranges early on Wednesday, as the prospect of a rate cut by the Federal Reserve was countered by worries a Sino-U.S. first-stage trade deal could be delayed.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.16% from Tuesday's three-month high while Japan's Nikkei .N225 slid 0.07% after hitting a one-year high the previous day.
On Wall Street, the S&P 500 index eked out a record intraday high, led by strong earnings from drug manufacturers such as Merck MRK.N and Pfizer (NYSE:PFE) PFE.N , though a disappointing profit report from Google parent Alphabet GOOGL.O kept the technology-rich Nasdaq in the red.
Markets had erased gains after Reuters reported a U.S. administration official said an interim trade agreement between Washington and Beijing might not be completed in time for signing in Chile next month as expected. the official added that it did not mean the accord was falling apart, which helped limit the damage to overall market sentiment.
The S&P 500 .SPX ended down 0.08% and the Nasdaq Composite .IXIC 0.59%.
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.42% on Tuesday to end at a 21-month high, having rallied 2.6% so far this month.
For the past few weeks, global equities have drawn support from hopes for a trade compromise between the United States and China, as well as from expectations of further U.S. monetary policy loosening.
Investors now expect the Fed to cut interest rates by 0.25 percentage point for the third time this year later in the day.
"With a cut today completely priced in, markets are looking to the Fed's stance on its policy outlook," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
While Fed funds rate futures 0#FF: fully price in a 25- basis-point cut on Wednesday, only about a 30% chance of another cut in December has been priced in, compared with about 70% earlier this month.
"The Fed will probably try to avoid sounding too dovish. Its message will essentially be that while it could act in December if needed, it won't unless there are big uncertainties on the economy," said Sumitomo Mitsui's Ichikawa.
Fading expectations of aggressive rate cuts by the Fed have lifted the two-year U.S. bond yield to 1.644% US2YT=RR , compared with a two-year low of 1.368% set in early October.
The 10-year U.S. Treasuries yield stood at 1.833% US10YT=RR , near a 1-1/2-month high of 1.860% touched earlier this week.
That has helped to lift the dollar against the yen. The dollar was traded at 108.87 yen JPY= , after having hit a three-month high of 109.07 yen
The euro stood at $1.11135 EUR= , having bounced off from Tuesday's low of $1.10735.
Sterling was little changed after Britain decided to hold an election on Dec. 12 following Prime Minister Boris Johnson winning approval from parliament for an early ballot aimed at breaking the Brexit deadlock. Johnson seeks to gain a parliamentary majority to ratify his Brexit deal, the election would be highly unpredictable as Brexit has fatigued and enraged swathes of voters, while eroding traditional loyalties to the two major parties, Conservative and Labour.
The currency last traded at $1.2866 GBP=D4 ,
Oil prices were little changed, with Brent crude LCOc1 futures up 0.02% at $61.60 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 lost 0.13% to $55.47 per barrel. (Editing by Jacqueline Wong)