Shares rose on Wall Street and in Europe as investors awaited new signals on interest rates but Chinese stocks tumbled on continued disappointment over a lack of fresh stimulus in the world’s second biggest economy.
Oil prices fell for a second day on reports of rising US inventories and as Israel appears to be holding off — at least for the moment — from striking Iranian energy installations.
Wall Street has been bumpy in recent days, rallying Monday before giving up most of those gains Tuesday.
Last week’s strong jobs report has convinced most investors that the US Federal Reserve will go slow with future interest rate cuts. Fresh clues about the Fed’s future path should emerge this week, especially Thursday’s inflation report.
The “consumer price index report overshadows almost everything else in coming days and could limit moves on Wall Street as participants position for the data”, said Joe Mazzola, a strategist at Charles Schwab.
The minutes from the Fed’s September meeting, due later on Wednesday, will also be pored over for insight into the Fed’s thinking.
Hurricane Milton’s approach towards Florida was also holding back activity as investors waited to see its impact on transport companies, tourism and insurers.
Google parent company Alphabet was down about two percent Wednesday after the US Department of Justice announced Tuesday it would demand that Google make profound changes to how it does business and may even consider a breakup.
Boeing was down more than two percent after it suspended talks with its striking workers late Tuesday over what it said were unreasonable demands.
– China disappointment –
Chinese shares have also been volatile recently, with investors first enthusiastic about a series of steps to kickstart domestic growth and then left deflated Tuesday when a press conference did not provide any further measures.
“When the market’s expectations were set sky-high for a 2-3 trillion yuan stimulus package and instead got hit with a big, fat zero, the party was over before it even began,” said Stephen Innes, a partner at SPI Asset Management.
Investors are now awaiting a Saturday briefing on fiscal policy by Finance Minister Lan Fo’an for more indications about official plans.
But analysts warned there was unlikely to be the big “bazooka” stimulus akin to the support seen during the global financial crisis.
Shehzad Qazi at China Beige Book said Beijing was “opting for targeting stimulus — including allocating funds for projects previously announced”.
Hong Kong’s stock market had soared more than 20 percent between the first batch of announced measures in late September and the start of this week.
The Hang Seng Index collapsed more than nine percent on Tuesday — its worst day since 2008 — and shed another one percent Wednesday.
Shanghai ended 6.6-percent lower on Wednesday.
The dollar climbed against its main rivals on expectations that interest rate differentials will continue to favour the US currency.
– Key figures around 1540 GMT –
New York – Dow: UP 0.7 percent at 42,357.32 points
New York – S&P 500: UP 0.5 percent at 5,778.18
New York – Nasdaq Composite: UP 0.4 percent at 18,260.15
London – FTSE 100: UP 0.7 percent at 8,243.74 (close)
Paris – CAC 40: UP 0.5 percent at 7,560.09 (close)
Frankfurt – DAX: UP 1.0 percent at 19,254.93 (close)
Shanghai – Composite: DOWN 6.6 percent at 3,258.86 (close)
Hong Kong – Hang Seng Index: DOWN 1.4 percent at 20,637.24 (close)
Tokyo – Nikkei 225: UP 0.9 percent at 39,277.96 (close)
West Texas Intermediate: DOWN 0.8 percent at $72.95 per barrel
Brent North Sea Crude: DOWN 1.0 percent at $76.45 per barrel
Euro/dollar: DOWN at $1.0957 from $1.0981 on Tuesday
Pound/dollar: DOWN at $1.3087 from $1.3100
Dollar/yen: UP at 149.11 yen from 148.29 yen
Euro/pound: DOWN at 83.74 pence from 83.80 pence
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