European stock markets rose while Wall Street diverged on Tuesday as investors eyed signs of progress in talks to end Russia's war in Ukraine.

Markets were also waiting for a key speech by the US Federal Reserve chief later this week for clues on interest rate cuts that could bolster the world's biggest economy.

Hopes for a Ukraine breakthrough rose after US President Donald Trump said he spoke by phone with Russian counterpart Vladimir Putin, following a meeting Ukrainian President Volodymyr Zelensky and European leaders at the White House.

Zelensky said he was ready for what would be his first face-to-face talks with Putin since Russia's invasion nearly three and a half years ago.

Wall Street opened mixed, as the broad-based S&P 500 and the tech-heavy Nasdaq indexes retreated while the Dow rose.

London, Paris and Frankfurt stocks all advanced in afternoon deals following a lackluster session for Asian stock markets.

Defense stocks fell sharply as chances grew for a breakthrough in Ukraine peace talks, with Germany's Rheinmetall dropping 5.6 percent and France's Thales down four percent.

Investors were also eagerly awaiting a speech on Friday by US Federal Reserve chief Jerome Powell at the annual retreat of global central bankers in Jackson Hole, Wyoming.

Traders hope Powell will provide more clues about a possible Fed interest-rate cut at its September meeting, after data last week provided a mixed picture about inflation.

"Markets seem to be exercising some caution ahead of the Jackson Hole meeting later this week and as talks over a peace agreement between Russia and Ukraine remain inconclusive," said AJ Bell head of financial analysis Danni Hewson.

Oil prices, which have been volatile for several days — Russia is a major crude producer — retreated by more than once percent after gains on Monday.

"Oil prices have dropped a little as a deal edges closer, given that it's likely to lead to an easing of sanctions on Russia energy imports, increasing supplies on global markets," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Japan's Nikkei briefly hit an intraday record before retreating to close down 0.4 percent.

Shanghai ended flat while Hong Kong, Sydney and Seoul fell, and Singapore, Bangkok and Mumbai edged up.

Among individual companies, Intel shares advanced 6.6 percent in early New York trading after Japan-based tech investment giant SoftBank said it would invest $2 billion in the troubled US chip giant.

The announcement comes as the US government is reportedly considering taking a 10-percent stake in Intel.

SoftBank shares dropped four percent.

Key figures at around 1540 GMT

New York - Dow: UP 0.2 percent at 44,982.63 points

New York - S&P 500: DOWN 0.2 percent at 6,436.28

New York - Nasdaq: DOWN 0.5 percent at 21,525.04

London - FTSE 100: UP 0.3 percent at 9,183.45

Paris - CAC 40: UP 1.0 percent at 7,958.43

Frankfurt - DAX: UP 0.4 percent at 24,414.72

Tokyo - Nikkei 225: DOWN 0.4 percent at 43,546.29 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 25,122.90 (close)

Shanghai - Composite: FLAT at 3,727.29 (close)

Euro/dollar: UP at $1.1678 from $1.1666 on Monday

Pound/dollar: FLAT at $1.3505 from $1.3503

Dollar/yen: DOWN at 147.82 yen from 147.89 yen  

Euro/pound: UP at 86.46 pence from 86.40 pence

West Texas Intermediate: DOWN 1.2 percent at $61.94 per barrel

Brent North Sea Crude: DOWN 1.1 percent at $65.87 per barrel