Global equity prices have slipped for a third straight day due to growing nervousness about US central bank policy, even as Wall Street eked out a modest gain.
The dollar rallied as investors squared positions ahead of Friday's US nonfarm payrolls report, data that should help determine the timing of the next Federal Reserve interest rate hike.
MSCI's world stocks index, which tracks shares in 45 nations, was down 0.27 percent after a sharp drop in Japanese stocks.
"The central banking issue is more of a factor of everybody trying to stimulate their economies, and how much more can you do?," said Scott Fullman, chief strategist at Revere Securities LLC.
The recent string of weaker US data has further pushed back expectations for when the Fed might raise benchmark US rates.
Chicago Federal Reserve Bank President Charles Evans offered a lukewarm endorsement of a rate increase later this year.
UK services sector data on Wednesday showed Britain's economy is shrinking at the fastest pace since 2009, upping the pressure on the Bank of England to cut rates at a meeting on Thursday.
A recent drop in oil prices and concerns about the strength of European banks are among some of the other factors that have halted the rally in equity prices, Fullman said.
Wall Street advanced modestly after a sharp rise in oil prices boosted energy shares, while better-than-anticipated data on the labour market helped financial stocks.
"The focus, at least near term, is definitely on energy prices and if we can hold $40 (oil) the market is fine here. If it can't hold $US40, there is going to be more pressure on the overall market," said Tim Ghriskey, chief investment officer of Solaris Group in New York.
The Dow Jones industrial average rose 41.23 points, or 0.23 percent, to close at 18,355, the S&P 500 gained 6.76 points, or 0.31 percent, to finish at 2,163.79 and the Nasdaq Composite added 22.01 points, or 0.43 percent, to end at 5,159.74.
European shares ended little changed as a rebound by the region's struggling banks and a rally in carmaker Fiat Chrysler helped offset losses among companies that reported poor earnings updates.
Europe's broad FTSEurofirst 300 index closed up 0.07 percent at 1,322.21.
The dollar index, which tracks the greenback against six major currencies, was up 0.52 percent to 95.559, recovering from six-week lows hit the previous session.
Oil prices jumped more than three percent, with US crude futures returning to above $40 a barrel, after a larger-than-expected US petrol draw offset a surprise build in crude stockpiles.
Brent crude settled up $US1.30, or 3.11 percent, at $US43.10 a barrel, while US crude settled up $US1.32, or 3.34 percent, at $US40.83.
In bond markets, US Treasury yields held steady, a day after jumping in response to Japan's new fiscal stimulus, as investors awaited the US jobs report on Friday.
Benchmark 10-year Treasuries prices were down slightly to yield 1.545 percent, from a yield of 1.537 percent late Tuesday.
The rallying dollar led the price of gold lower from a three-week high set in the previous session. A stronger dollar makes gold more expensive for buyers in other currencies.
Spot gold prices were down 0.38 percent to US$1,356.98 an ounce.