Global markets-US stocks stay lower after Fed leaves rates unchanged

Investors are also awaiting a wave of key earnings, with Microsoft MSFT.O and Meta META.O due to report after the market close, followed later this week by Amazon.com AMZN.O and Apple AAPL.O. Global markets have been volatile this month as investors question the sustainability of the AI spending boom amid signs that major U.S. companies are deepening a web of AI-linked investments and continuing to funnel billions into the technology at the expense of free cash flow. "The pressure is shifting from spending plans to returns on investment. Investors want evidence that AI capex is generating revenues now, while also strengthening the future growth outlook," said Gina Martin Adams, chief market strategist at HB Wealth. The scrutiny comes as competition from China intensifies, both in the race to develop advanced chips and as Chinese firms roll out cheaper AI models. Expectations have grown so lofty that even a sixfold jump in SK Hynix's 000660.KS quarterly profit fell short, sending its shares tumbling 9.61%. South Korea's KOSPI .KS11, which has become emblematic of the wild swings in AI sentiment, fell nearly 6% a day after sinking more than 10% to a three-month low. In response, South Korea will introduce additional curbs on single-stock leveraged exchange-traded funds, or ETFs, including a cap that could limit an individual's investment in such products to 20% of their total investment assets, the finance ministry said on Wednesday. The pan-European STOXX 600 .STOXX index fell 0.29%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 0.36%. The MSCI All Country World Price index .MIWD00000PUS was last down 0.45% and earlier reached its lowest level since June 11. Oil prices were up around 7% after major airstrikes resumed in the Middle East, dashing hopes for an imminent end to the Iran war. The rally was compounded by industry data showing a drop in U.S. crude inventories. "There's been a lot of stop-and-start news out of the Middle East, and I think until we get some sort of resolution, that's a bit more durable, we'll continue to see that headline risk crop up," said Bill Merz, head of capital markets research and portfolio construction at U.S. Bank Wealth Management in Minneapolis. July 29 (Reuters) - U.S. stocks remained lower on the day, interest-rate sensitive 2-year Treasury yields reversed their earlier increase and the dollar slipped on Wednesday after the Federal Reserve held interest rates steady in a move that was generally expected by economists. The decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee that "preferred" a quarter-percentage-point hike at this meeting. A recent uptick in oil prices due to the resumption of fighting in the war on Iran had raised some expectations that the U.S. central bank could hike rates this week. That is despite inflation data for June moderating more than economists had expected. "After the June inflation print showed some progress, this move was to be expected," said JP Powers, chief investment officer at TWA Wealth Partners. "But each meeting we're now building more uncertainty around it than the last." The Dow Jones Industrial Average .DJI was last down 1.55% at 51,928.87, the S&P 500 .SPX fell 0.50% to 7,391.31 and the Nasdaq Composite .IXIC dipped 0.37% to 24,784.10. The interest rate sensitive 2-year Treasury US2YT=RR yield was flat at 4.277%. The yield on benchmark U.S. 10-year notes US10YT=RR rose 3.67 basis points to 4.641%. The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.25% to 101.17.

Global markets-US stocks stay lower after Fed leaves rates unchanged

Earnings and AI spending remain in focus

Oil rises on renewed Middle East airstrikes

Fed leaves rates unchanged as stocks stay lower

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