Tokyo and South Korea advanced while Hong Kong retreated and Shanghai swung between gains and losses.
On Monday, Wall Street s benchmark S&P 500 index rose to a new record, shrugging off worries about the spread of the more contagious delta variant of the coronavirus.
Investors awaited the Fed report Wednesday for signs of the central bank's level of concern about inflation and when it might start rolling back easy credit and other economic stimulus. Minutes of the Fed meeting in June showed board members discussed how and when they might reduce monthly bond purchases that inject money into the financial system.
“We expect Jay Powell to reiterate that the tapering discussion is underway, but that it’s too soon to reveal a specific date,” Danielle DiMartino Booth of Quill Intelligence said in a report.
The Shanghai Composite Index was down 0.2% at midday at 3,461.03 after spending much of the morning in positive territory. The Nikkei 225 in Tokyo advanced 0.5% to 27,969.76 while the Hang Seng in Hong Kong sank 2% to 25,647.68.
The Kospi in Seoul rose 0.2% to 3,232.35.after economic growth moderated to 0.7% over the previous quarter in the three months ending in June, down from previous quarter's 1.7%.
Australia's S&P-ASX 200 advanced 0.5% to 7,429.90 and India's Sensex opened up 0.1% at 52,912.28. New Zealand, Bangkok and Jakarta, Indonesia, declined while Singapore advanced.
On Wall Street, the S&P 500 rose 0.2% to 4,422.30. The Dow Jones Industrial Average gained or 0.2% to 35,144.31. The Nasdaq composite added less than 0.1% to 14,840.71.
Cruise lines, hotels and retailers were among the winners. Carnival rose 5.5%, Caesars Entertainment added 3.3% and Gap rose 3%. Among stocks that lost ground: Drug maker Moderna slid 3.7% and chipmaker Nvidia fell 1.4%.
U.S.-traded shares in Chinese companies sank after Beijing announced additional enforcement measures on technology, real estate and for-profit education ventures. Chinese authorities say they need to protect public safety and financial stability, restrain surging housing costs and promote social welfare. But their abrupt orders shook investor confidence.
China’s industry ministry announced a 6-month campaign to clean up what it says are serious problems with internet apps violating consumer rights, cyber security and “disturbing market order.” Internet giant Tencent slid 10% following a weekend order by regulators to end exclusive contracts with music copyright holders that they said harmed competition.
“"A painfully sobering message may be: ‘You can take the company listing out of China, but you can’t take China (risks) out of the company,’” said Mizuho Bank in a report. “If unresolved, this may ultimately impair the ability of Chinese firms to raise global capital, a serious impediment to Beijing’s aspirations to grow global champions.”
U.S. traders are looking for earnings reports from more large companies this week. Google's parent, Alphabet, reports Tuesday. So do Apple and Microsoft. Pfizer and Boeing report Wednesday.
Electric vehicle company Lucid Motors, now dubbed Lucid Group, rose 10.6% in its public debut after being bought by blank-check company Churchill Capital Corp.
In energy markets, benchmark U.S. crude gained 26 cents to $72.17 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to $71.91 on Monday. Brent crude, used to price international oils, advanced 29 cents to $73.99 per barrel in London. It rose 40 cents the previous session to $74.50.
The dollar dollar declined to 110.22 yen from Monday's 110.39 yen. The euro edged up to $1.1802 from $1.1800.