San Francisco Frontiers - Stocks diverge, dollar gains before tech earnings, Fed decision

While most analysts expect the Fed to keep its benchmark rate unchanged, a stronger-than-expected showing for US economic growth in the second quarter bolstered expectations that a future cut could be in the cards -- potentially helping the greenback.

"The Fed isn't expected to change rates but the market will analyse the accompanying commentary for signals on what could happen next," said Russ Mould, investment director at AJ Bell.

The US economy expanded 3.0 percent in the quarter, above the consensus analyst forecast of 2.5 percent, though experts cautioned over the distorting effects of President Donald Trump's tariffs blitz.

"The data remains consistent with a cooling growth story, but there appears to be little pressing need for an interest rate cut despite the president's demands," said James Knightley, an economist at ING.

Mould added that following the Fed's update "the central bank will certainly be watching jobs data on Friday like a hawk, and that result will feed into its future monetary policy decisions".

"All the while, we've got four of the Magnificent Seven mega-cap US tech stocks reporting over the next two days... any signs of weakness could damage investor sentiment."

Meta and Microsoft are due to post earnings after the Street close, with Amazon and Apple results coming Thursday.

Investors will also focus on the firms' forecasts in light of Trump's tariffs and their colossal investments in artificial intelligence.

In Europe, Paris and Frankfurt indexes rose after the eurozone economy unexpectedly expanded in the second quarter, which preceded a weekend tariffs deal between the US and the EU that had also bolstered sentiment.

After a deal was also reached with Japan over the past week, focus is now on negotiations between Washington and Beijing to extend an agreement to lower eye-watering levies that threatened the world's largest economies.

The two-day meeting in Stockholm ended Tuesday without a resolution but with the US team voicing optimism they could announce a second 90-day truce.

Among the countries still to reach a trade deal with Washington are Brazil, which faces 50 percent tariffs, South Korea and India.

Trump said Tuesday that New Delhi could face a rate of 20 to 25 percent, adding: "India has been a good friend, but India has charged basically more tariffs than almost any other country. You just can't do that."

Oil prices fell, having rallied Tuesday after Trump reiterated his warning of new sanctions on Russia, a major energy power, unless it reaches a truce deal with Ukraine.

- Key figures at around 1400 GMT -

New York - S&P 500: UP 0.1 percent at 6,375.13 points

New York - Dow Jones: DOWN 0.1 percent at 44,599.79

New York - Nasdaq: UP 0.2 percent at 21,142.12

London - FTSE 100: DOWN 0.2 percent at 9,121.56 points

Paris - CAC 40: UP 0.5 percent at 7,896.91

Frankfurt - DAX: UP 0.2 percent at 24,268.07

Tokyo - Nikkei 225: DOWN 0.1 percent at 40,654.70 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 25,176.93 (close)

Shanghai - Composite: UP 0.2 percent at 3,615.72 (close)

New York - Dow: DOWN 0.5 percent at 44,632.99 (close)

Euro/dollar: DOWN at $1.1464 from $1.1554 on Tuesday

Pound/dollar: DOWN at $1.3275 from $1.3357

Dollar/yen: UP at 149.06 yen from 148.50 yen

Euro/pound: DOWN at 86.37 pence from 86.47 pence

West Texas Intermediate: UP 0.6 percent at $69.58 per barrel

Brent North Sea Crude: UP 0.5 percent at $72.03 per barrel

M.Gonzalez--SFF