European stocks rose Wednesday, cheered by a further stabilization in Chinese equity markets, but trading volumes were expected to remain thin and investors cautious ahead of a policy statement from the U.S. Federal Reserve later in the day.

The Stoxx Europe 600 added 0.6% early in the session, building on Tuesday's 1.1% gain. China's shares oscillated between gains and losses Wednesday as officials stepped up efforts to calm markets on the back of three days of selling that has knocked 11% off the value of China's main stock index and severely unnerved global investors.

"Sentiment towards China remains highly volatile," said Ian Williams, an economist and strategist at brokerage Peel Hunt in London. He added, however, that investors broadly appear calmer early Wednesday than they might have a day ago.

Gains in Europe were also spurred by some of stronger-than-expected corporate earnings.

Shares in British American Tobacco PLC rose close to 3% after the maker of Dunhill and Lucky Strike cigarettes r eported higher first-half profitbuoyed by investments that helped offset currency losses.

Shares in Barclays PLC also rallied after the lender reported a sharp rise in second-quarter net profit compared with the year-earlier period and announced it was scrapping its dividend target to retain capital.

Later in the session, investors' attention will focus on the U.S. Fed's policy statement.

Chairwoman Janet Yellen isn't scheduled to host a news conference and the Fed won't publish any fresh economic projections, but officials could give some hints about the economy's trajectory and the outlook for policy.

Paul Donovan, an economist at UBS, said there is no expectation for a change in policy Wednesday but market participants will be waiting to see whether the Fed signals an intention to raise interest rates as early as September.

"What we are likely to get is a Fed that emphasizes data dependency, and this therefore perhaps makes the forthcoming data more important than the Fed decision today," he wrote in a note to clients.

A first reading for second-quarter U.S. gross domestic product, the broadest sum of goods and services produced across the economy, is due Thursday.

The euro was 0.2% lower against the dollar in early trade at $1.1034. The dollar was also little changed against Japan's yen.

In commodity markets, Brent crude was 0.8% lower at $52.86 a barrel having already Tuesday hit its lowest level since January on concerns about the persistent global oil glut. Gold was 0.1% higher at $1,097.40 per troy ounce.

Write to Josie Cox at josie.cox@wsj.com

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