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European stocks mixed before Fed

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U.S.-China trade talks end without major breakthroughs

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Investors await central bank decisions and corporate

earnings

By Samuel Indyk and Gregor Stuart Hunter

LONDON, July 30 (Reuters) - Global stocks struggled for

clear direction ahead of the Federal Reserve's policy

announcement later on Wednesday, with investors cautious after

two days of trade talks between the U.S. and China concluded

without any major breakthroughs.

Treasury yields and the dollar were also little changed as

the market anticipated the Fed will keep rates on hold despite

pressure from the White House to lower borrowing costs.

Europe's STOXX 600 was up 0.1%, with blue-chip

indexes rising slightly in Frankfurt and Paris

and falling in London.

S&P 500 and Nasdaq futures were pointing to

a slightly higher open when Wall Street trading gets underway.

Early gains for MSCI's broadest index of Asia-Pacific shares

outside Japan petered out to trade flat. Japan's

Nikkei 225 ended the session little changed.

Investors await several central bank decisions, economic

reports and corporate earnings over the coming days, as well as

U.S. President Donald Trump's August 1 tariff deadline.

Although the Federal Reserve is expected to leave interest rates

unchanged at the conclusion of its two-day policy meeting later

on Wednesday, analysts have predicted some central bank

officials who favour lower borrowing costs could voice rare

dissent, signalling that a rate cut could happen soon.

"I'm not expecting a rate cut," said George Lagarias, chief

economist at Forvis Mazars. "They're going to hint a rate cut in

September, but they're not going to commit themselves to

it."

The yield on the benchmark 10-year U.S. Treasury note

was flat at 4.324, having briefly dropped to its

lowest since July 3 at 4.314%. The two-year yield,

which is more sensitive to change in interest rate expectations,

was little changed at 3.869%.

With the Bank of Japan expected to keep policy unchanged on

Thursday, the markets will analyse its comments to gauge when

the next rate increase will come after a trade deal between

Japan and the U.S. cleared the way for the bank to resume rate

hikes.

Some of the negotiations with countries seeking to avert

Trump's punitive tariffs are expected to continue up to the

deadline.

India is among those bracing for higher U.S. tariffs - likely

between 20% and 25% - on some exports as it holds off on fresh

trade concessions ahead of the deadline, two Indian government

sources said.

Meanwhile, three South Korean cabinet-level officials met with

U.S. Commerce Secretary Howard Lutnick in a last-ditch push for

a deal.

CORPORATE EARNINGS CONTINUE

Earnings were mixed on Wednesday. UBS Group reported

profits that exceeded analysts' expectations, while HSBC

profits missed estimates as its losses from China

mounted.

German sportswear maker Adidas and French luxury

group Kering both flagged that tariffs were having an

impact on costs and pricing.

U.S. tech megacaps Microsoft ( MSFT ) and Meta are

due to report earnings on Wednesday that will set the tone for

the rest of the week and the earnings season.

"It's been a solid U.S. reporting season so far, but these

megacap names need to run it hot and blow the lights out, given

the bar to please has been sufficiently raised," said Chris

Weston, head of research at Pepperstone.

In currency markets, the dollar index, which measures

the currency against six others, rose less than 0.1% to 98.986,

just below a five-week high of 99.143 reached on Tuesday.

The euro was down 0.1% against the dollar. The

U.S. currency dropped 0.2% to 148.26 yen.

Brent crude futures eased 0.8% to $71.96 a barrel

and U.S. crude futures were down 0.8% at $68.68.

Spot gold was up 0.1% to $3,327.85 after hitting a

2-1/2 week low on Monday.