San Francisco Frontiers - Stock markets diverge awaiting Fed signals as tech sell-off deepens

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

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

Wall Street was mostly lower at the open, with the tech-heavy Nasdaq falling again as shares in AI chip-maker Nvidia fell 1.7 percent ahead of its earnings release next week.

Its rival Advanced Micro Devices and software provider Palantir also saw heavy selling again on Wednesday.

Paris and Frankfurt fell, with European defence stocks adding to losses on signs that 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 hopes 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 rate cuts soon.

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 the 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 while 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 0.9 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 1540 GMT -

New York - Dow: FLAT at 44,936.58 points

New York - S&P 500: DOWN 0.5 percent at 6,381.98

New York - Nasdaq: DOWN 1.0 percent at 21,106.14

London - FTSE 100: UP 1.1 percent at 9,288.14 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,973.03 (close)

Frankfurt - DAX: DOWN 0.6 percent at 24,276.97 (close)

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 $1.1662 from $1.1646 on Tuesday

Pound/dollar: DOWN at $1.3467 from $1.3489

Dollar/yen: DOWN at 147.15 yen from 147.64 yen

Euro/pound: UP at 86.62 pence from 86.33 pence

West Texas Intermediate: UP 1.2 percent at $62.51 per barrel

Brent North Sea Crude: UP 1.2 percent at $66.59 per barrel

J.Martinez--SFF