Stock market today: Global shares mostly fall ahead of earnings reports

TOKYO (AP) — Global shares mostly declined in cautious trading Tuesday ahead of earnings reports around the globe, as Wall Street’s long, record-breaking rally lost steam.

France's CAC 40 lost 0.3% to 7,516.20, while the German DAX rose 0.4% to 19,526.85. Britain's FTSE 100 fell 0.5% to 8,281.14. The futures for the S&P 500 and the Dow Jones Industrial Average were down 0.3%.

In Asian trading, Japan's benchmark Nikkei 225 dropped 1.4% to finish at 38,411.96. Australia's S&P/ASX 200 fell 1.7% to 8,205.70, while South Korea's Kospi slipped 1.3% to 2,570.70.

Hong Kong's Hang Seng gained 0.1% to 20,498.95 and the Shanghai Composite rose 0.5% to 3,285.87 following a cut to interest rates that took effect on Monday.

“The next two weeks are set to be a wild ride. Volatility has surged across stocks, bonds, and currencies as investors brace for a perfect storm of risks: a hotly contested U.S. election, critical interest-rate decisions in both the U.S. and Europe, the looming threat of a wider Middle East conflict, and the ever-present pressure of quarterly earnings,” Stephen Innes, managing partner at SPI Asset Management said in a commentary.

On Monday, the S&P 500 slipped 0.2% and the Dow dropped 0.8%. The Nasdaq composite rose 0.3%.

Wall Street’s rally to records this year has been based on hopes the U.S. economy can escape from the worst inflation in generations without a painful recession that many investors had worried could be inevitable.

With the Federal Reserve now cutting interest rates to keep the economy humming, optimists hope stocks can rise even further. But critics are warning stock prices look too expensive given they’ve climbed much faster than corporate profits.

That puts pressure on companies to deliver growth in profits to justify their stock prices, and more than 100 companies in the S&P 500 are scheduled to give details this week about their performances during the summer. That includes such heavyweights as AT&T, Coca-Cola, IBM, General Motors and Tesla.

The Bank of Canada will also announce its latest decision on interest rates Wednesday, where it could cut by half a percentage point.

In energy trading, benchmark U.S. crude lost 20 cents to $69.84 a barrel. Brent crude, the international standard, fell 18 cents to $74.11 a barrel.

In currency trading, the U.S. dollar rose to 150.99 Japanese yen from 150.69 yen. The euro rose to $1.0829 from $1.0819.