Hong Kong stocks fell after China's economy slowed across the board in July, with factory activity, investment, and retail sales disappointing. Subdued earnings also weighed on the Hang Seng. However, the onshore CSI 300 Index ended the morning session higher, with small caps outperforming.

The yen and Japanese stocks gained after the nation's economy expanded faster than expected last quarter, boosting the case for the Bank of Japan to raise its benchmark rate again this year. JGB yields also rose, despite the chief trade negotiator saying US Treasury Secretary Scott Bessent isn't directly asking the BOJ to hike.

The blistering run in stocks hit a wall as a pick-up in inflation lifted bond yields alongside the dollar, with traders paring bets the Federal Reserve will cut interest rates next month. The S&P 500 eked out another record despite closing nearly unchanged.

The administration is in talks with Intel Corp. to have the US government potentially take a stake in the beleaguered chipmaker, helping support the company's effort to expand domestic manufacturing.

US Treasury Secretary Scott Bessent said he isn't calling for a series of interest-rate cuts from the Federal Reserve, just pointing out that models suggest a “neutral” rate would be about 1.5 percentage points lower. Meanwhile, Federal Reserve Bank of Richmond President Tom Barkin said he sees signs that the environment for US consumers improved in July.