With inflation worries already elevated owing to Donald Trump's pledges to slash taxes, regulations and immigration when he returns to the White House, the latest readings added to uncertainty on trading floors.

A closely watched survey of the crucial US services sector saw a pick-up in December, with the prices component soaring far more than expected to hit the highest level since last January.

A separate report showed job openings also outstripped forecasts in November to touch a six-month high.

The readings made the case for the Federal Reserve to slow its pace of rate cuts, having lowered them three times last year thanks to easing inflation.

Focus now turns to Friday's release of the key non-farm payrolls report, which will provide a fresh snapshot of the state of the labour market and US economy.

Yields on key 10-year US Treasuries rose and options suggest they could hit five percent for the first time since October 2023, according to Bloomberg News.

That comes after the central bank undertook a more hawkish pivot last month and lowered its outlook for cuts, while several decision makers have recently championed a more cautious approach.

All three main indexes on Wall Street ended in the red on Tuesday, with the Nasdaq and S&P 500 shedding more than one percent each.

Tech firms, which had led a surge the previous day, were again the key drivers of action, with chip titan Nvidia tanking after a disappointing product presentation.

Asian markets, however, diverged.

Tokyo, Hong Kong, Taipei, Manila, Mumbai and Jakarta all fell, though Sydney, Singapore, Seoul, Wellington and Bangkok rose. Shanghai barely moved.

London and Frankfurt edged up at the open, while Paris was flat.

"Recent Fed signals suggest a cautious approach to rate cuts amid a resilient job market and sticky inflation," said Stephen Innes.

"Still, investors are now unanimously betting against any rate changes this month. Moreover, according to the CME FedWatch Tool, odds are tipping below 50 percent for a rate cut before June, underscoring a tense watch on the Fed's next moves."

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: DOWN 0.3 percent at 39,981.06 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 19,279.84 (close)

Shanghai - Composite: FLAT at 3,230.17 (close)

London - FTSE 100: UP 0.1 percent at 8.254,06

Euro/dollar: DOWN at $1.0330 from $1.0342 on Tuesday

Pound/dollar: DOWN at $1.2461 from $1.2479

Dollar/yen: UP at 158.16 yen from 157.98 yen

Euro/pound: UP at 82.90 pence from 82.87 pence

West Texas Intermediate: UP 0.7 percent at $74.73 per barrel

Brent North Sea Crude: UP 0.5 percent at $77.46 per barrel

New York - Dow: DOWN 0.4 percent at 42,528.36 (close)

dan/fox

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INDEX CORP.