* Sterling hits 28-mth low on heightened no-deal Brexit woes
* Stocks hurt by Trump's China warning
* Fed expected to cut rates on Wednesday (Updates with open of U.S. markets, changes dateline; previous LONDON)
By Chuck Mikolajczak
NEW YORK, July 30 (Reuters) - A gauge of global stock markets edged lower after a warning from U.S. President Donald Trump to China as bilateral trade talks began on Tuesday, while concerns over a no-deal Brexit dragged on sterling for a fourth day.
Trump warned China against waiting out his first term in office before finalizing a trade deal, saying if he wins re-election in the November 2020 presidential contest, the outcome could be no agreement or a worse one.
Investors have already been bracing for the Federal Reserve's impending policy announcement on Wednesday, in which the central bank is widely expected to cut U.S. rates by at least a quarter of a percentage point, its first reduction since the financial crisis.
"The real conundrum is if, in fact, the Fed cuts rates because they are seeing a global economic slowdown and no real inflation, then the administration becomes emboldened to fight this battle longer," said Art Hogan, chief market strategist at National Securities in New York.
"If not for trade policy, we would not be using monetary policy in the way we are using it now."
On Wall Street, major stock averages declined, but were off their initial lows.
The Dow Jones Industrial Average fell 26.83 points, or 0.1%, to 27,194.52, the S&P 500 lost 7.96 points, or 0.26%, to 3,013.01 and the Nasdaq Composite dropped 24.23 points, or 0.29%, to 8,269.10.
The broadside against China by Trump also weighed on European indexes, along with soft forecasts from German giants Bayer and Lufthansa.
The pan-European STOXX 600 index lost 1.47% and MSCI's gauge of stocks across the globe shed 0.37%.
In currencies, sterling continued to stumble after suffering its biggest decline of the year on Monday as no-deal Brexit concerns mounted.
New Prime Minister Boris Johnson promised on Tuesday to lead Britain out of the European Union on Oct. 31 "no matter what" and followed that up by saying the next move in talks was up to the European Union. Johnson added he did not want to leave the bloc without a deal but had to prepare for that outcome just in case.
Sterling fell as far as $1.2117, its lowest against the dollar since March 2017 and was last trading at $1.2171, down 0.38% on the day. The pound was on track for its fourth straight daily decline.
The dollar index, tracking the unit against six major currencies, rose 0.05%, with the euro up 0.04% to $1.1149.
U.S. Treasury yields rose ahead of the Fed announcement, after data showed consumer confidence rebounded in July to its strongest level since November.
Benchmark 10-year notes last fell 3/32 in price to yield 2.0632%, from 2.055% late on Monday.
Among commodities, crude oil prices climbed for a fourth day as the Fed rate cut anticipation boosted demand expectations.
U.S. crude rose 0.49% to $57.15 per barrel and Brent was last at $64.02, up 0.63% on the day.
Reporting by Chuck Mikolajczak; Editing by Bernadette Baum