Global Stocks Edge Lower Ahead of Fed -- Update

Apple's disappointing results and declines in mining companies pressured global stocks Wednesday ahead of an update from the Federal Reserve.

Futures pointed to a 0.2% opening loss for the S&P 500 after the world's most valuable company posted an increase in profit but reported tepid iPhone demand. Shares of index-heavyweight Apple and its suppliers fell in premarket trading after the tech giant soared to record highs earlier this year.

Europe-listed suppliers of Apple also came under pressure Wednesday, with shares of STMicroelectronics down 2.4% and Dialog Semiconductor off 3.6%.

"There's quite a lot of optimism built into tech--it was slightly less positive than people were hoping for," said John Stopford, head of multiasset income at Investec Asset Management.

The Nasdaq Composite had closed at a fresh high on Tuesday.

The broader Stoxx Europe 600 was down 0.3% late morning, weighed by a 2.6% drop in the basic resources sector. Chinese iron-ore futures fell sharply after an earlier winning streak and copper futures shed 2.5% to trade at $5,660 a ton, weighing on the sector.

Europe's auto sector was down 1.1% following downbeat U.S. auto sales figures on Tuesday.

Investors were also waiting for the latest update from the Fed, due later Wednesday. Market participants currently price a less than 5% chance of an interest-rate rise in May, according to CME Group, and Wednesday's Fed meeting doesn't feature a news conference or new economic projections.

"We expect this to be one of the more boring FOMC announcements," strategists at RBC Capital Markets said.

Still, investors will be interested in any hints at a rate increase in June and the central bank's views on recent economic developments following a modest downturn in growth and inflation figures.

U.S. 10-year Treasury yields were unchanged at 2.296% ahead of the Fed meeting, while the WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.2%.

Jon Adams, investment strategist at BMO Global Asset Management, said he believes the Fed is unlikely to signal a change in stance Wednesday despite a wobble in inflation figures.

Since the Fed's last meeting, "We have taken a bit of a step back from an economic standpoint, but the earnings picture in the U.S. has been very strong," he said. "We knew energy and materials would be strong, but we've seen very broad-based earnings growth."

The combination of mostly solid first-quarter earnings and diminishing political fears has helped keep U.S. equities buoyant in recent sessions, with the S&P 500 off just 0.2% from its record close.

In Europe, French 10-year yields edged lower to 0.733% from 0.745% Tuesday, while German yields fell to 0.321% from 0.325% ahead of a televised debate Wednesday between Emmanuel Macron and Marine Le Pen, who face off in Sunday's final round of the French presidential election.

"In all likelihood, it'll be a Macron victory, but our concern is the probability [for Le Pen] is not quite as low as the market is pricing in, " said Mr. Stopford, pointing to a high number of undecided voters and the risk of low turnout for Mr. Macron. Mr. Stopford has taken on some more defensive positions in Europe ahead of the vote.

The euro was last off 0.1% at $1.0913, while the British pound was down 0.2% at $1.2916.

Earlier, bank stocks dragged down Australian bourses for a second session following an underwhelming report from Australia and New Zealand Banking to start the sector's earnings season. The S&P ASX 200 fell 1% as weakness among lenders and declines in shares of mining companies offset a partial rebound in some oil-related stocks in Australia.

Brent crude oil was last up 0.9% at $50.91 a barrel after an industry-group reading showed a decline last week in U.S. oil and gasoline stockpiles.

Chinese equities were mostly weaker as investors sold stocks related to the Xiongan economic zone, a proposed megacity that is a two-hour drive south of Beijing. The Shanghai Composite Index shed 0.3%.

Markets in Japan, South Korea and Hong Kong were closed for holidays.

Yifan Xie,

Harriet Torry

, and Robb M. Stewart contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

May 03, 2017 07:25 ET (11:25 GMT)