By Nathan Allen
-- The Stoxx Europe 600 fell 0.3%, while Germany's DAX dropped 0.6%
-- Asian indexes mostly rose, though Japan's Nikkei slipped 0.7%
-- The yield on 10-year U.S. Treasurys edged down to 2.073%
Declines in technology companies and auto stocks led European bourses lower Tuesday, as investors remained cautious ahead of a series of central-bank meetings this week.
Germany's Siltronic AG fell more than 9% after the chip maker cut its 2019 guidance, citing the dampening effects of global trade tensions, while rival Infineon AG shed 5% after a EUR1.5 billion capital increase.
Rising tensions between the U.S. and Iran were overhanging market activity, adding to the risk-off mood. Tehran said Monday it would exceed limits on its enriched-uranium stockpiles, while Washington pledged to send an additional 1,000 troops to the region.
Central bank meetings in the U.S., Europe and Asia were also in focus, with traders reluctant to take definitive positions until the Federal Reserve publishes its decision on a potential rate cut on Wednesday. Fed officials don't want to disappoint markets, which were pricing in further easing, but robust U.S. economic data may push them to leave rates unchanged for now.
"A less dovish readjustment in the language could be a disappointment for the markets and send the U.S. stock and bond markets tumbling," Ipek Ozkardeskaya, senior market analyst at LCG Capital said.
Meanwhile in Europe, investors were following the European Central Bank's annual conference in Sintra, Portugal for any hints on the direction of future monetary policy. In remarks scheduled for this morning, ECB President Mario Draghi is likely to address concerns that the bank lacks sufficient tools to support the regional economy after eurozone inflation expectations hit a new low.
"Draghi will be keen to address and convince the market that the ECB still has the control to achieve their desired monetary targets," Chris Weston, head of research at Pepperstone Group said.
Most Asian markets posted modest gains, with Hong Kong's Hang Seng Index rising 1.1% to extend Monday's rally. Korea's Kospi rose 0.4% but Japan's Nikkei 225 fell 0.7%.
Futures for the S&P 500 and the Dow Jones Industrial Average were unchanged after both indexes closed slightly higher Monday. Changes in futures don't necessarily reflect moves after the opening bell.
In commodities, Brent crude dropped 0.5% to $60.62 a barrel, while gold rose 0.6% to $1,350 a troy ounce.
The WSJ dollar index, which measures the currency against a basket of its peers, fell 0.1%.
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