Global markets mixed, pausing ahead of Fed chief testimony

Men walk past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, July 10, 2019. Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman. (AP Photo/Eugene Hoshiko)
An electronic stock board showing Japan's Nikkei 225 index at a securities firm is seen on a street in Tokyo Wednesday, July 10, 2019. Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman. (AP Photo/Eugene Hoshiko)
A woman looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, July 10, 2019. Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman. (AP Photo/Eugene Hoshiko)
A man looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, July 10, 2019. Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman. (AP Photo/Eugene Hoshiko)
People walk past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, July 10, 2019. Asian shares were mostly higher Wednesday in cautious trading ahead of closely watched congressional testimony by the U.S. Federal Reserve chairman. (AP Photo/Eugene Hoshiko)

TOKYO — Global shares were mixed Wednesday in cautious trading ahead of closely watched congressional testimony by the chairman of the U.S. Federal Reserve, Jerome Powell.

France's CAC 40 inched up less than 0.1% to 5,573.88 in early trading. Germany's DAX lost less than 0.1% to 12,431.43, while Britain's FTSE 100 fell nearly 0.1% to 7,529.10.

U.S. shares were set to drift lower with Dow futures slipping 0.2% to 26,738. S&P 500 futures dipped 0.1% at 2,978.70.

Investors are awaiting two days of congressional testimony by Powell. Traders will be listening to the exchanges with lawmakers on Wednesday and Thursday for hints about the Fed's next move on interest rates.

The market rallied through much of June after the central bank signaled it's prepared to cut rates to offset slowing global growth and the fallout from U.S. trade conflicts. But an unexpectedly strong U.S. jobs report last Friday has dimmed investors' expectations.

Many traders still expect the Fed will cut its benchmark rate by a quarter percentage point at the end of the month, but fewer are now expecting a half-point reduction.

The question is whether the Fed will still see a good argument for cutting interest rates after the strong U.S. June jobs data.

The Fed's benchmark interest rate currently stands in a range of 2.25% to 2.5% and the central bank has not cut rates since the Great Recession in 2008. Last year, Fed officials raised rates four times, partly to stave off the risk of high inflation and partly to try to ensure that they would have room to cut rates if the economy stumbled.

"The picking up of tech stocks overnight on Wall Street presents a positive lead for Asia markets, though risks persist with the Fed testimony ahead," said Jingyi Pan, market strategist for IG in Singapore.

"Fed Powell's testimony will be scrutinized for both his views on the economic situation and guidance in terms of any upcoming moves."

Japan's benchmark Nikkei 225 edged down nearly 0.2% to finish at 21,533.48. Australia's S&P/ASX 200 added 0.4% to 6,689.80. South Korea's Kospi gained 0.3% to 2,058.78. Hong Kong's Hang Seng rose 0.3% to 28,204.69, while the Shanghai Composite fell 0.4% at 2,915.30.

ENERGY: Benchmark crude oil added $1.17 to $59.00 per barrel. It gained 17 cents to $57.83 a barrel on Tuesday. Brent crude oil, the international standard, rose $1.16 to $65.32 a barrel.

CURRENCIES: The dollar rose to 108.89 Japanese yen from 108.86 yen. The euro rose to $1.1228 from $1.1208.

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AP Business Writer Alex Veiga contributed to this report.

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