Sawt Falasteen - Stocks diverge, dollar steady before Fed rate decision

The Dow was little changed in late morning trading in New York, while the wider S&P and the tech-heavy Nasdaq were lower.

In Europe, London and continental bourses mostly rose, with the notable exception of Paris, which was dragged down by poor results from luxury group LVMH, Europe's largest company by market value.

While the Federal Reserve is expected to keep interest rates unchanged at its Wednesday meeting, investors were awaiting Fed Chairman Jerome Powell's post-meeting comments, given President Donald Trump's pressure to lower rates.

"The real wait-and-see item is the press conference," said Patrick J. O'Hare, an analyst at Briefing.com. "The intrigue revolves around the press conference and how Fed Chair Powell will describe the Fed's deliberations over the inflation data and what Powell thinks about President Trump's view that he knows more about interest rates than the Fed Chair does."

US stocks took a hammering Monday, with chip giant and market darling Nvidia collapsing almost 17 percent, after China's DeepSeek unveiled a chatbot that apparently matched the capacity of US artificial intelligence pace-setters for a fraction of the investments made by American companies.

Tuesday saw a tech rebound, with Nvidia surging 8.8 percent, as some analysts voiced doubts over whether DeepSeek's AI was developed as cheaply as it claims, and with others saying that more cost-effective AI applications are good for everyone.

Besides the Fed, US investors are also awaiting earnings from Meta, Microsoft and Tesla after the market shuts, which should give further direction to tech sector stocks.

In Paris, LVMH shares were down more than five percent after it reported late Tuesday that net profit shrank 17 percent last year, leading its chief executive Bernard Arnault to complain about the high level of taxes in France.

Shares in Dutch tech giant ASML, which sells cutting-edge machines to make semiconductors, closed more than 6 percent higher on Wednesday after it reported solid orders in the fourth quarter.

European stock markets have been supported by expectations that the European Central Bank will cut rates 25 basis points Thursday to revive stagnant European economies.

"The ECB's dovish stance has provided a tailwind for European equities," said Daniela Sabin Hathorn, senior market analyst at Capital.com. "As momentum shifts from US to European markets, further upside in European stocks remains a strong possibility."

The dollar was holding on to its recent gains, driven by expectations of steady interest rates in the US and sliding rates in Europe.

Trump's plans to slash taxes, restrict immigration and impose tariffs, all of which could reignite inflation and therefore keep borrowing costs higher for longer -- even if the president has told the independent Fed that he wants lower rates.

Earlier in the day, Tokyo's stock market rebounded after having taken a heavy hit over the previous two days as its chip companies tanked.

There were gains also in Sydney, Wellington and Mumbai, though Bangkok dipped. Chinese indices were closed for the holidays.

Oil prices fell on reports of growing US crude reserves and on expectations that Trump's tariff policy could reduce demand.

- Key figures around 1640 GMT -

New York - Dow: UP LESS THAN 0.1 percent at 44,870.43 points

New York - S&P 500: DOWN 0.4 percent at 6,045.31

New York - Nasdaq Composite: DOWN 0.7 percent at 19,589.65

London - FTSE 100: UP 0.3 percent at 8,557.81 (close)

Paris - CAC 40: DOWN 0.3 percent at 7,872.48 (close)

Frankfurt - DAX: UP 1.0 percent at 21,637.53 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 39,414.78 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0419 from $1.0433 on Tuesday

Pound/dollar: DOWN at $1.2432 from $1.2440

Dollar/yen: DOWN at 155.04 yen from 155.53 yen

Euro/pound: DOWN at 83.79 pence from 83.84 pence

West Texas Intermediate: DOWN 0.6 percent at $73.33 per barrel

Brent North Sea Crude: DOWN 0.4 percent at $77.21 per barrel

Q.Bulbul--SF-PST