Global benchmarks are mixed as market focus turns to the Federal Reserve

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TOKYO (AP) — Global shares traded mixed Wednesday after U.S. stocks edged down from record highs and as market focus turned to expectations for the Federal Reserve's first interest rate cut of the year.

France's CAC 40 edged up nearly 0.1% in early trading to 7,824.89, while the German DAX surged 0.4% to 7,824.89. Britain's FTSE 100 added 0.2% to 9,213.50. U.S. shares were set to be little changed with Dow futures unchanged at 46,121.00. S&P 500 futures inched down less than 0.1% to 6,664.00.

Japan's benchmark Nikkei 225 slipped 0.3% to finish at 44,790.38.

The Finance Ministry reported Japan's exports to the U.S. dropped 13.8% in August compared to the same month the previous year, marking the fifth straight month of declines, as auto exports were hit by President Donald Trump's tariffs.

U.S. tariffs on Japanese automobiles and auto parts dropped from 27.5%, the amount Trump initially levied, to 15% this week, still higher than the original 2.5%. Wednesday's data was for the month of August, when the tariffs were higher. Japan's overall exports to the world for the month were little changed, slipping 0.1%, as exports grew to Europe and the Middle East.

Australia's S&P/ASX 200 slipped 0.7% to 8,818.50. South Korea's Kospi dropped nearly 1.1% to 3,413.40.

Hong Kong's Hang Seng surged 1.8% to 26,908.39, while the Shanghai Composite rose nearly 0.4% to 3,876.34, as technology shares rose on what analysts said were hopes investments in artificial intelligence will prove lucrative. Alibaba Group stocks jumped 2.6%, while Baidu stocks surged nearly 16%.

Stocks have run to records on expectations that the Fed will announce the first of a series of cuts to rates on Wednesday in hopes of giving the U.S. economy a boost. The job market has slowed so much that traders believe Fed officials now see it as the bigger danger for the economy than the threat of higher inflation because of Trump’s tariffs.

The Fed has been holding off on cuts to rates because inflation has remained above its 2% target, and lower interest rates could give it more fuel.

A report on Tuesday said shoppers increased their spending at U.S. retailers by more last month than economists expected. The data did little to change traders’ expectations for a cut to interest rates on Wednesday, followed by more through the end of the year and into 2026.

In energy trading, benchmark U.S. crude lost 46 cents to $64.06 a barrel. Brent crude, the international standard, fell 47 cents to $68.00 a barrel.

In currency trading, the U.S. dollar edged up to 146.43 Japanese yen from 146.40 yen. The euro cost $1.1853, down from $1.1867.