U.S. stock futures were largely unchanged early Wednesday as Wall Street extended its losing streak to a third day, pressured by escalating bond yields and rising oil prices amid heightened Middle East tensions. Asian markets experienced a broad decline, with Japan’s Nikkei 225 and South Korea’s Kospi seeing significant drops, while European bourses are also anticipated to open lower. Investors are focusing on upcoming economic data, including ADP private payrolls, and corporate earnings from tech giants like Hewlett Packard Enterprise, Snowflake, and Broadcom.
Early Wednesday, U.S. stock futures showed minimal movement as Wall Street concluded its third consecutive losing day, largely influenced by a sharp rise in bond yields and escalating oil prices. Futures for the Dow Jones Industrial Average climbed by approximately 0.1%, gaining 24 points. Meanwhile, S&P 500 futures edged slightly lower, and Nasdaq 100 futures saw a marginal decline of just under 0.1%.
Across Asian markets, a broad downturn was observed: Japan's Nikkei 225 dipped 2.80% and the Topix fell 2.18%. South Korea's Kospi experienced a more significant drop of 3.59%, with the small-cap Kosdaq also down 1.49%. Australia's S&P/ASX 200 benchmark was 1.17% lower, while Hong Kong's Hang Seng index decreased by 0.96%. Mainland China's CSI 300 also saw a decline of 1.25%.
The Dow Jones Industrial Average shed over 400 points, primarily impacted by a downturn in technology stocks, which saw the Nasdaq Composite slide by roughly 1%.
West Texas Intermediate (WTI) oil prices surged past $90 per barrel on Wednesday, reaching their highest point since late July. This spike followed additional U.S. military strikes on Iran, fueling worries about a further escalation of Middle East tensions.
On Tuesday, the U.S. 10-year Treasury yield reached a level not seen since early 2025. This rise is the latest indicator of a broader global bond market sell-off, prompting some investors to draw parallels to the 1997 Asian financial crisis.
Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group, commented that 'Higher yields are proving to be the stock market's undoing.' He added that these elevated yields compel analysts to apply more aggressive discounts to future earnings, consequently pushing price-to-earnings (P/E) multiples lower.
Investors are eagerly anticipating Wednesday's release of the ADP's private payrolls data for August. Market participants will also closely observe factory earnings figures and the Federal Reserve's Beige Book.
Post-market close on Wednesday, investors will be monitoring earnings reports from key technology companies, including Hewlett Packard Enterprise, Snowflake, and Broadcom.
Global bond sell off deepens
Global bond yields continued their upward trajectory as concerns over burgeoning government debt and renewed Middle East tensions compounded, following Tuesday's significant sell-off.
The yield on the 10-year U.S. Treasury note advanced by over 1 basis point to 4.8102%, touching its highest mark since November 2023. Concurrently, the 30-year Treasury yield rose 2 basis points, reaching 5.2878%.
In the U.K., yields on 10-year Gilts, the standard for British government debt, were up more than 4 basis points to 5.2660%, while the longer-dated 30-year Gilt yield remained steady at 5.8537%.
German 10-year Bund yields, a key indicator for euro zone borrowing, increased by over 3 basis points in early Wednesday trading to 3.3759%. The 30-year Bund yield also climbed more than 3 basis points to 3.8468%, nearing levels last seen in 1998.
Yields on Japan's benchmark 10-year government bonds persisted above 3%.
—Hugh Leask
Nokia set to rejoin Stoxx 50 — with Volkswagen dropping out
Nokia is poised to rejoin the Stoxx 50 later this month, while Volkswagen appears likely to be removed from Europe's prestigious blue-chip index.
Shares of the Finnish telecommunications giant soared to an 18-year high in June, having doubled in value year-to-date.
In contrast, VW's stock has plummeted 30% this year, as the German automotive giant navigates intense competition from Chinese manufacturers and undertakes a major restructuring. This comes amidst the carmaker's announcement of plans to cease production at four German plants between 2031 and 2034.
— Hugh Leask
European markets set to start Wednesday's session in the red
Stoxx 50 futures declined by 0.51% ahead of Wednesday's opening, with all major European exchanges expected to open in negative territory. This sentiment was fueled by continued increases in global energy prices following new U.S. strikes on Iran.
The French CAC 40 was down 0.29% in premarket trading, while in the U.K., the FTSE 100 was anticipated to open 0.45% lower. Italy's FTSE MIB was projected to fall 0.51% at the open, and Germany's DAX was set to begin the day 0.58% lower.
—Hugh Leask
Oil rises following tit-for-tat strikes by the U.S. and Iran
Oil prices climbed on Wednesday as Middle East tensions continued to intensify. This came after the U.S. conducted its latest series of attacks on Iran, with Tehran reportedly retaliating against U.S. allies.
Futures for international benchmark Brent crude for November delivery gained 0.92% to $95.52 a barrel, partially paring earlier increases. U.S. West Texas Intermediate futures for October rose 0.60% to $90.76 per barrel.
Edward Rosenberg, head of ETFs at Strategy Shares, stated that 'The longer the war with Iran goes on, oil prices will continue to stay elevated and volatile.' He added that 'Sanctions, stalled negotiations, and mixed signals on whether Iran wants the war to end are swinging prices day to day, not just holding them high.'
—Justina Lee
Japanese green tea giant Ito En surges 8%, defying a broad market sell-off
Shares of Japanese beverage manufacturer Ito En soared over 8% on Wednesday, in defiance of a widespread market decline across the country. This surge followed the release of its fiscal first-quarter results.
The producer of Oi Ocha green tea reported an operating profit of 10.2 billion yen ($63.7 million) for the three months spanning May through July, marking a 22% increase from the previous year. Revenue for the same period climbed 3.3% to 135.18 billion yen.
Notably, the operating profit significantly exceeded Citi's forecast of 7.7 billion yen. Citi had anticipated a profit decrease, attributing it to higher raw material and tea leaf costs, alongside expenses associated with the company's vending machine operations.
—Jenny Lee
Australia posts second-quarter growth of 2.1%, beating expectations
Australia's economy surpassed growth expectations in the second quarter, expanding by 2.1% year-on-year, according to data released Wednesday.
Economists surveyed by Reuters had predicted a growth rate of 1.8%, while the economy had previously grown by 2.5% in the preceding quarter.
On a quarter-on-quarter basis, GDP increased by 0.4%, also slightly exceeding the 0.3% forecast. This modest growth was primarily fueled by private demand and mining exports.
The Australian Bureau of Statistics indicated in its statement that households maintained cautious spending habits, with consumption remaining subdued and rising only 0.4%. Households curtailed fuel usage due to elevated prices linked to the Middle East conflict and reduced both domestic and international travel.
—Lim Hui Jie
Mainland China and Hong Kong benchmark indexes open lower
Benchmark indexes in Mainland China and Hong Kong commenced trading lower, reflecting a broad decline across Asian markets.
Hong Kong's Hang Seng index was down 1.09%, while mainland China's CSI 300 experienced a nearly 1% drop.
The declines in the Hang Seng were predominantly led by the basic materials and industrials sectors, which fell by 3.74% and 3.19% respectively.
—Justina Lee
Asia-Pacific markets open lower, tracking Wall Street losses
Asia-Pacific markets opened lower early Wednesday, driven by concerns over elevated oil prices, rising bond yields, and escalating Middle East tensions, echoing losses seen on Wall Street.
Japan's Nikkei 225 dipped 1.60% while the Topix fell 1.44%.
The Kospi in South Korea declined 2.87% at open, and the small-cap Kosdaq saw a 2.51% decrease.
Australia's benchmark S&P/ASX 200 was 1.09% lower.
—Justina Lee
Asia-Pacific markets set to open lower as Mideast tensions, higher bond yields dent sentiment
Asia-Pacific markets were poised for a broadly lower open on Wednesday, mirroring Wall Street's losses amidst anxieties over intensifying Middle East tensions, elevated oil prices, and rising bond yields.
Japan's Nikkei 225 was expected to decline, with its Chicago futures contract trading at 64,845 and its Osaka counterpart at 64,880, compared to the index's previous close of 66,215.34.
Hong Kong's Hang Seng index futures were at 25,176, versus the index's last close of 25,329.73.
Futures for Australia's S&P/ASX 200 last traded at 8,933, while the index closed at 9,066.70.
Tensions between Iran and the U.S. continue to escalate, following the latest round of U.S. attacks on Iran.
The U.S. Central Command stated in an X post that the strikes 'follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members.'
The U.K. Maritime Trade Operations Centre reported an incident on Monday where a tanker transiting Hormuz was struck by three unidentified projectiles.
—Justina Lee
See the stocks moving after hours
These are some of the stocks moving after hours:
- Dell Technologies — Shares of the computer manufacturer surged nearly 9% after exceeding expectations on both revenue and earnings. Dell also raised its fiscal 2027 outlook, citing robust performance in its artificial intelligence service division.
- MongoDB — The data developer's shares fell 12% despite reporting stronger-than-expected earnings and optimistic guidance. MongoDB announced adjusted earnings of $1.90 per share on $772 million in the second quarter, surpassing LSEG analysts' forecasts of $1.61 per share and $734 million.
- Credo Technology — Shares of the connectivity stock slid almost 4% after its non-GAAP gross margin for the first quarter came in at 68%, slightly below analysts' estimates of 68.3% polled by LSEG. However, Credo did outperform expectations for both revenue and earnings in the first quarter.
— Alex Harring
Stock futures are near flat
Futures linked to the Dow, S&P 500, and Nasdaq 100 all exhibited minimal movement shortly after 6 p.m. ET Tuesday.
— Alex Harring
