Sawt Falasteen - Stocks diverge, dollar slips before tech earnings, Fed decision

Market watchers also kept tabs on China-US developments after the two countries agreed further talks to extend their tariffs truce.

"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.

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

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

After Asia's major stock markets closed mixed, London was down slightly around midday.

But Paris and Frankfurt climbed as official data showed the eurozone economy unexpectedly expanded in the second quarter, which preceded a weekend tariffs deal between the US and the EU, which had also bolstered sentiment.

After a deal was also reached with Japan over the past week, focus has been 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 without a resolution but with the US team voicing optimism they could announce a second 90-day truce.

The general feeling is that the moratorium will be extended but there remains some nervousness, with many other countries still to reach agreements ahead of Trump's August 1 deadline.

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

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."

Major earnings releases from tech titans Meta and Microsoft are due Wednesday, with Amazon and Apple coming Thursday.

As well as the results, focus will be on the firms' forecasts in light of Trump's tariffs and their colossal investments in artificial intelligence.

In London, shares in British bank HSBC and military equipment maker BAE Systems dropped around 2.5 percent following mixed earnings updates Wednesday.

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 1100 GMT -

London - FTSE 100: DOWN 0.3 percent at 9,112.42 points

Paris - CAC 40: UP 0.5 percent at 7,896.33

Frankfurt - DAX: UP 0.2 percent at 24,261.10

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 $1.1540 from $1.1554 on Tuesday

Pound/dollar: UP at $1.3365 from $1.3357

Dollar/yen: DOWN at 148.19 yen from 148.50 yen

Euro/pound: DOWN at 86.37 pence from 86.47 pence

West Texas Intermediate: DOWN 1.0 percent at $68.52 per barrel

Brent North Sea Crude: DOWN 1.0 percent at $71.80 per barrel

A.Suleiman--SF-PST