Stock markets diverged Wednesday as a global rally faded, despite more data that soothed fears of a further rise in US interest rates.
Wall Street closed higher as private sector hiring data came in softer than expected, while second quarter GDP growth was revised down to 2.1 percent on an annual measure.
The latest figures and other weaker numbers revealed on Tuesday "appear to be adding weight" to the idea of a pause in rate hikes by the US Federal Reserve next month, said CMC Markets UK analyst Michael Hewson.
This adds to "further downward pressure on yields," he said. Lower yields on bonds tend to boost stocks as they signify lower borrowing costs for companies.
Fed chief Jerome Powell said last week the US central bank stands ready to hike interest rates further, having already pushed them to a 22-year high to tame prices, if data shows the US economy continues to grow strongly and price pressures persist.
But the Fed's data-dependent approach is also seen as keeping the possibility open that interest rates may not go any higher if the world's largest economy cools.
That set off strong gains at the beginning of the week, particularly after Tuesday's report on US job openings, which was softer than anticipated. Analysts said it would give monetary policymakers room to hold off on lifting borrowing costs again.
"Signs of America's cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.
But with stocks having posted solid gains in recent days, the rally may be running out of steam.
"We suspect traders might be showing some hesitation, thinking that this heady action can't persist or, at least, opting to wait and see if it does," said analyst Patrick O'Hare at Briefing.com.
On Wednesday, the Dow closed 0.1 percent higher while the S&P 500 rose 0.4 percent.
Investors may also be showing caution as more data is due later this week, including the Fed's preferred gauge of inflation -- the personal consumption expenditures price index -- as well as US government payrolls data.
"Today's data was never likely to be overly impactful with tomorrow's inflation, income, and spending figures, prior to Friday's payrolls, always the primary focus," said analyst Craig Erlam of OANDA.
"That could well set the tone for September ahead of some major central bank meetings," he added in a note.
In Europe, London stocks rose while Frankfurt and Paris fell. Tokyo closed higher, but Shanghai and Hong Kong flattened.
Focus was also on China after a report said its biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country's beleaguered property sector.
And after Asian markets closed, China's embattled real estate giant Country Garden reported losses of approximately $6.7 billion for the first half of this year while warning of possible default.
The company's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.
- Key figures around 2030 GMT -
New York - Dow: UP 0.1 percent at 34,890.24 points (close)
New York - S&P 500: UP 0.4 percent at 4,514.87 (close)
New York - NASDAQ Composite: UP 0.5 percent at 14,019.31 (close)
London - FTSE 100: UP 0.1 percent at 7,473.67 (close)
Frankfurt - DAX: DOWN 0.2 percent at 15,891.93 (close)
Paris - CAC 40: DOWN 0.1 percent at 7,364.40 (close)
EURO STOXX 50: DOWN 0.3 percent at 4,315.31 (close)
Tokyo - Nikkei 225: UP 0.3 percent at 32,333.46 (close)
Hong Kong - Hang Seng Index: FLAT at 18,482.86 (close)
Shanghai - Composite: FLAT at 3,137.14 (close)
Euro/dollar: UP at $1.0925 from $1.0884 on Tuesday
Pound/dollar: UP at $1.2719 from $1.2644
Dollar/yen: UP at 146.23 yen from 145.87 yen
Euro/pound: DOWN at 85.87 pence from 86.05 pence
Brent North Sea crude: UP 0.4 percent at $85.86 per barrel
West Texas Intermediate: UP 0.6 percent at $81.63 per barrel