Stocks steady after Wall St record, oil slumps

LONDON/SYDNEY, Oct 15 (Reuters): European shares and US futures were little changed on Tuesday after Wall Street scaled record highs the previous day, while oil prices dropped on a report that Israel would refrain from striking Iranian energy targets.
Chinese stocks, meanwhile, tumbled as a media report that detailed extra government borrowing to boost the economy appeared to underwhelm investors.
Europe's STOXX 600 index was down 0.1 per cent on Tuesday, after rising on Monday, leaving it within 1 per cent of a record high reached in September. Oil and gas stocks fell, but airlines rallied on lower energy prices.
Germany's DAX stock index was up 0.2 per cent after hitting a record high earlier in the session, but Britain's energy-focused FTSE 100 was down 0.5 per cent.
Futures for the US S&P 500 index were slightly lower after the benchmark Wall Street gauge hit a record high on Monday, led by chip stocks after a 2.4 per cent jump in AI darling Nvidia and a brisk start to the third-quarter earnings season with JP Morgan and Wells Fargo beating expectations.
"New highs beget new highs and price momentum is the most powerful investment factor," said Ben Laidler, head of equity strategy at Bradesco BBI.
"Super-sized tech stocks are taking the lead as they get ready to report the strongest earnings growth of all sectors again this quarter."
Stock market investors have gained confidence thanks to US data suggesting the world's biggest economy is heading for a "soft landing" - with inflation falling back to the Federal Reserve's target but growth remaining robust and the labour market cooling only slightly.
Goldman Sachs reported a jump in profit as earnings season continued on Tuesday, before a wave of big tech companies next week.
Oil prices fell sharply, declining for a third straight session, after the Washington Post reported that Israeli Prime Minister Benjamin Netanyahu told the United States that Israel is willing to strike Iranian military targets and not nuclear or oil ones, as it prepares its response to air strikes this month.
Brent crude futures fell 3.8 per cent to $74.47 a barrel, having dropped 2 per cent overnight, with the market focused on China's economic slowdown and lower OPEC demand forecasts.
Brent crude and WTI crude oil prices have fallen relatively sharply as China's economic weakness has dented demand
Brent crude and WTI crude oil prices have fallen relatively sharply as China's economic weakness has dented demand
China's CSI 300 stock index fell 2.7 per cent, while Hong Kong's Hang Seng index slid nearly 3.7 per cent as investors were left wanting more details on Beijing's stimulus plans.
Chinese media reported Beijing may raise an additional 6 trillion yuan ($850 billion) from Treasury bonds over three years to help bolster a sagging economy.
"Chinese shares have surged since the September politburo meeting on hopes that major fiscal stimulus may be on the way. A lack of details so far has disappointed some investors, so we eye policy announcements for more clarity," analysts at BlackRock Investment Institute, led by Wei Li, said in a research note.
In currency markets, the dollar slipped 0.3 per cent to 149.36 yen, pulling back from a 2-1/2-month high of 149.98 overnight.
The euro was roughly flat, languishing near a 10-week trough. The currency has been pulled down by a growing gap between US and European bond yields - which have stayed low as markets anticipate a third interest rate cut by the European Central Bank on Thursday.
US Federal Reserve official Christopher Waller on Monday called for "more caution" on interest-rate cuts, while Fed Minneapolis President Neel Kashkari said he also envisages more modest reductions.
US 10-year Treasury yields rose slightly to 4.078 per cent on Tuesday after bond markets were closed on Monday.