Global shares trade mixed as focus shifts to Fed's next move

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TOKYO (AP) — Global shares traded mixed Tuesday as eyes turned to U.S. data reports set for release later in the week that are likely to impact whether the Federal Reservecuts interest rates at its next meeting.

France's CAC 40 rose 0.1% in early trading to 7,742.97, while the German DAX fell nearly 0.5% to 23,697.43. Britain's FTSE 100 gained 0.1% to 9,232.78. U.S. shares were set to drift only moderately with Dow futures little changed at 45,593.00. S&P 500 futures rose 0.1% to 6,511.75.

In Asia, Japan's benchmark Nikkei 225 erased earlier gains to finish 0.4% lower at 43,459.29, as political uncertainty continued after Prime Minister Shigeru Ishiba said over the weekend that he planned to step down. Who will replace him is still uncertain and may take weeks to decide. The benchmark had momentarily surpassed the 44,000 mark.

Anticipation over one of the likely candidates, Sanae Takaichi, a hawkish legislator, sent defense issues higher in Tokyo trading. Mitsubishi Heavy Industries rose 0.3%, IHI added 1.0% and Kawasaki Heavy 0.4%. Veteran ruling party legislator Toshimitsu Motegi has indicated he wants to run, and other expected contenders include Farm Minister Shinjiro Koizumi and Chief Cabinet Secretary Yoshimasa Hayashi. All are members of the ruling Liberal Democratic Party, which will need coalition partners to stay in power.

Australia's S&P/ASX 200 declined 0.6% to 8,793.60. South Korea's Kospi climbed 1.3% to 3,260.05. Hong Kong's Hang Seng surged 1.2% to 25,938.13, while the Shanghai Composite fell 0.5% to 3,807.29. The mixed trading followed a stronger opening in Asia.

“Asian markets opened Tuesday with momentum, riding Wall Street’s conviction that Fed cuts are no longer a question of if but how many. Nearly three reductions are now being priced before year-end. That expectation is washing through global markets like a spring tide,” said Stephen Innes, managing partner at SPI Asset Management.

Updates are coming later this week on the U.S. economy and inflation, which could alter expectations among traders, who at the moment are unanimously forecasting the Fed will cut its main interest rate for the first time this year at its meeting two Wednesdays from now.

The Fed has been more worried about the potential of inflation worsening because of President Donald Trump’s tariffs than about the job market. But a slew of recent reports showing the U.S. job market is slowing may be changing minds.

On Tuesday, the U.S. government will release preliminary revisions for job growth numbers reported through March, and it could show that hiring was weaker than earlier thought. Reports on inflation will follow on Wednesday and Thursday.

In energy trading, benchmark U.S. crude gained 85 cents to $63.11 a barrel. Brent crude, the international standard, added 87 cents to $66.89 a barrel.

In currency trading, the U.S. dollar slipped to 146.68 Japanese yen from 147.51 yen. The euro cost $1.1757, down from $1.1765. Gold has been rising as a safe investment, surpassing the $3,600 per ounce mark. Gold has been gaining on the back of a falling dollar and anticipation for the Fed's rate cut.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama