* Fed likely to leave rates steady, despite market outlook
* MSCI global stocks index hits six-week high
* Fed decision comes after ECB's Draghi hints at stimulus
* Benchmark yields rise after day-earlier tumble (Updates with open of U.S. markets; changes dateline, previous LONDON)
By Lewis Krauskopf
NEW YORK, June 19 (Reuters) - A gauge of global stock markets gained modestly on Wednesday to reach six-week highs and benchmark government bond yields rose from multiyear lows as investors awaited a decision on monetary policy from the U.S. Federal Reserve later in the session.
Investor hopes that the Fed would soon cut interest rates were fed on Tuesday when European Central Bank President Mario Draghi hinted at economic stimulus, comments that drove up stocks and weakened yields.
The Fed is due to give its policy statement at 2 p.m. EDT (1800 GMT) followed by a news conference from Chairman Jerome Powell, and "there's not a lot of incentive for traders to be really directionally betting" ahead of time, said Mark Hackett, chief of investment research at Nationwide.
The Fed is expected to leave rates on hold at Wednesday's meeting, but the market is factoring in a cut as soon as next month.
"Equity markets have already placed their bets," Hackett said. "The issue is Powell needs to reinforce that."
MSCI's gauge of stocks across the globe gained 0.37%.
The Dow Jones Industrial Average rose 37.65 points, or 0.14%, to 26,503.19, the S&P 500 lost 0.79 points, or 0.03%, to 2,916.96 and the Nasdaq Composite dropped 9.64 points, or 0.12%, to 7,944.25.
The pan-European STOXX 600 index lost 0.05%.
Aside from Draghi's comments, equity markets got a boost on Tuesday when U.S. President Donald Trump confirmed he would meet with Chinese counterpart Xi Jinping at next week's G20 meeting, as the two sides rekindled trade talks.
U.S. Treasury yields rose on Wednesday, tracking the European market after steep falls the previous day, as investors rebalanced positions ahead of the Fed decision.
Benchmark 10-year notes last fell 10/32 in price to yield 2.0906%, from 2.058% late on Tuesday.
U.S. benchmark 10-year yields on Tuesday fell to their lowest since early September 2017. German yields climbed after falling deep into negative territory on Tuesday.
"People are mostly position-squaring ahead of the Fed today," said Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York. "Everything in some shape or form will change at 2 p.m. when the Fed announces its decision."
The dollar index fell 0.17%, with the euro up 0.16% to $1.1209.
U.S. crude rose 0.35% to $54.09 per barrel and Brent was last at $62.29, up 0.24% on the day.
Additional reporting by Gertrude Chavez-Dreyfuss in New York and Sujata Rao in London; Editing by Hugh Lawson and Jonathan Oatis