Volkswacht Bodensee - Stock markets diverge as traders eye US rate signals

Trading volumes were light overall, with the recent pullback in US tech heavyweights spurring caution after their stellar run since April.

Tuesday's US tech sell-off was "sparked by concerns about overexcitement and overvaluations in AI stocks," said Victoria Scholar, head of investment at Interactive Investor.

Wall Street was mixed at the open on Wednesday, with the tech-heavy Nasdaq extending the previous day's losses as shares in AI chip-maker Nvidia, its rival Advanced Micro Devices and software provider Palantir falling further.

Paris was up while Frankfurt fell in midday deals, with European defence stocks extending losses on signs a path may be clearing for Ukraine peace talks.

London's FTSE 100 index rose but the pound fell back from earlier highs after UK inflation rose more than expected in July, dampening bets that the Bank of England will cut rates again this year.

All eyes are now on the release later Wednesday of the minutes of the Federal Reserve's latest meeting, which could show if more board governors favour more proactive rate cuts.

Fed chief Jerome Powell -- who has resisted President Donald Trump's vociferous calls for rate cuts -- will then give a key speech Friday at the annual central bankers conference in Jackson Hole, Wyoming.

Data last week provided a mixed picture of inflation in the United States, making it uncertain if the Fed will lower rates as many investors expect in September -- which could bolster growth in the world's biggest economy.

Traders have also been watching a recent diplomatic whirlwind aimed at resolving the war in Ukraine, after President Donald Trump's high-stakes meeting with Russian counterpart Vladimir Putin in Alaska.

Eyes are now on potential face-to-face talks between Putin and Ukrainian President Volodymyr Zelensky, who has said he is ready for such a meeting.

Oil prices rose, recovering part of the losses from the previous day, as investors monitored progress on Ukraine peace talks.

In Asia, Tokyo closed down 1.5 percent after official data showed Japanese exports suffered their steepest drop in more than four years last month as US tariffs weighed.

Hong Kong advanced and Shanghai closed up one percent.

Hong Kong's stock exchange operator posted record half-year revenue, riding a renewed surge in listings and trading activity at the Chinese finance hub.

In company news, shares in mining giant Anglo American fell around 1.5 percent in London after US group Peabody Energy walked away from a $3.8 billion deal to buy its steelmaking coal business.

- Key figures at around 1345 GMT -

New York - Dow: UP 0.2 percent at 44,992.27 points

New York - S&P 500: DOWN 0.3 percent at 6,393.98

New York - Nasdaq: DOWN 0.8 percent at 21,135.10

London - FTSE 100: UP 1.0 percent at 9,278.04

Paris - CAC 40: UP 0.3 percent at 7,999.82

Frankfurt - DAX: DOWN 0.4 percent at 24,315.02

Tokyo - Nikkei 225: DOWN 1.5 percent at 42,888.55 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 25,165.94 (close)

Shanghai - Composite: UP 1.0 percent at 3,766.21 (close)

Euro/dollar: UP at $1.1666 from $1.1646 on Tuesday

Pound/dollar: DOWN at $1.3483 from $1.3489

Dollar/yen: DOWN at 147.32 yen from 147.64 yen

Euro/pound: UP at 86.52 pence from 86.33 pence

West Texas Intermediate: UP 1.1 percent at $62.43 per barrel

Brent North Sea Crude: UP 1.0 percent at $66.44 per barrel

A.Zbinden--VB