* Microsoft ( MSFT ), Alphabet, Amazon ( AMZN ) and Meta earnings due

* UAE exit from OPEC surprises oil market

* Trump unhappy with latest proposal from Tehran

By Gregor Stuart Hunter

SINGAPORE, April 29 (Reuters) - Markets got off to an

uneven start in Asian trading on Wednesday as worries about the

Iran conflict and health of the AI sector dominated ahead of the

Federal Reserve's decision and earnings from tech megacap stocks

later in the session.

MSCI's broadest index of Asia-Pacific shares outside Japan

eased 0.2%, retreating for a second day from

record highs set on Monday, led by declines for Taiwanese

chipmakers. Japanese markets were closed for a holiday.

S&P 500 e-mini futures nudged up 0.1%, while Brent

crude rose 0.4% to $111.71 per barrel as efforts to end the Iran

conflict hit an impasse.

"Markets remained cautious overnight as peace talks

continued to stall, with Iran seeking the lifting of the U.S.

naval blockade of the Strait of Hormuz and mediators expecting a

revised Iranian proposal in coming days," analysts from Westpac

wrote in a research note.

U.S. President Donald Trump is unhappy with the latest

proposal from Tehran as he wants nuclear issues dealt with from

the outset, a U.S. official said.

The Wall Street Journal reported on Tuesday, citing U.S.

officials, that Trump has instructed aides to prepare for an

extended blockade of Iran.

Stocks on Wall Street sold off on Tuesday, with the S&P 500

sliding 0.5% and the Nasdaq Composite falling

0.9% as investors assessed the stalemate in Iran.

Tech shares also took a hit after the Journal reported that

AI heavyweight OpenAI had missed internal targets for weekly

users and revenue, raising concerns over the ChatGPT parent's

ability to support its massive spending on data centres. The

report weighed on shares of Oracle and CoreWeave.

Earnings from U.S. tech giants Microsoft ( MSFT ), Alphabet

, Amazon ( AMZN ) and Meta Platforms ( META ), due

later on Wednesday, will further test the AI-driven rally.

Corporate America has shown resilience in the face of the

Iran conflict: with slightly more than one-third of S&P 500

sectors having already reported profits, 81% of companies have

beaten estimates.

Market attention will turn to the outcome of the Federal

Reserve's April meeting later on Wednesday, which will be Jerome

Powell's last as Fed chair.

Traders believe a hold is a certainty. Fed funds futures are

pricing an implied 100% probability the U.S. central bank will

stand pat, with no policy changes expected until late in 2027,

according to the CME Group's FedWatch tool.

"Given the challenging war-impacted inflation environment,

it won't cost much for the Fed to adopt a hawkish tilt; while

remaining in a wait-and-see mode," analysts from ING wrote in a

research report. "There will also be questions on the incoming

Kevin Warsh and Powell's intention to stay or go."

The yield on the U.S. 10-year Treasury bond was up 0.6 basis

point at 4.346%, while the U.S. dollar index, which

measures the greenback's strength against a basket of six

currencies, edged up 0.1% to 98.67, rising for a second

consecutive day.

Markets also digested the surprise exit of the United Arab

Emirates from OPEC, though expectations are that the rest of the

oil producer alliance will likely stick together.

"On any other given day, this news may have seen the Brent

price move down $5 to $6 off the bat, given the UAE accounts for

around 10% of OPEC output," said Chris Weston, head of research

at Pepperstone Group Ltd in Melbourne.

"However, with the UAE's production facilities currently

close to capacity, it is perhaps no surprise that Brent

front-month futures quickly erased the initial drop."

Gold was down 0.3% at $4,581.40. In cryptocurrency

markets, bitcoin was flat at $76,471.21 while ether

was 0.3% lower at $2,289.16.