Global Markets Slip Following Tech Selloff

By Dow Jones Newswires Staff

U.S. stock futures started Wednesday lower after a tech-led selloff in the prior session. An MIT report said the vast majority of companies investing in generative AI have yet to see returns. Global stock markets mostly took their cue from that, too, albeit with a more mixed picture in Asia. Investors await clues on the Federal Reserve's plans for interest-rate cuts, with the minutes from its last meeting landing later. Still, the decisive factor will be what Fed Chair Jerome Powell says in a speech at the Jackson Hole symposium Friday. Elsewhere, Sweden's Riksbank held its benchmark rate steady as expected, while Bank Indonesia cut by 25 basis points to 5.0%.

Lowe's and Target report earnings after Home Depot posted disappointing quarterly results on Tuesday, while Walmart reports on Thursday.

• U.S. Nasdaq stock futures were down 0.3% early in European hours. Futures for the S&P 500 and Dow Jones Industrial Average edged down around 0.1%.
• Shortly after the open in Europe, the Stoxx Europe 600 fell 0.3% with France's CAC 40 declining 0.5% and Germany's DAX dropping 0.8%. The U.K.'s FTSE 100 lost 0.1%. Shares of European semiconductor companies fell following the selloff across U.S. tech giants.
• Asian indexes ended mixed, with China's indexes reversing their early session losses, while Japan and South Korea closed lower. The Nikkei fell 1.5%, partly due to weak July exports data that marked its biggest drop in four years. South Korea's Kospi declined 0.7%. Taiwan's largest companies and index heavyweights, TSMC and Foxconn Technology Group, which count U.S. companies Nvidia and Apple as their biggest clients, fell 4.2% and 3.6%, respectively.
• The dollar was steady against a basket of currencies while U.S. Treasury yields ticked up after falling on Tuesday. Fed Chair Jerome Powell has "sufficient grounds to be cautious about the pace of interest-rate cuts," said Commerzbank's Antje Praefcke, with inflation still above target and the labor market showing signs of weakness but not slumping. The DXY dollar index was trading flat at 98.313.
• Sterling rose after data showed U.K. inflation accelerated at a more-than-expected 3.8% clip in July, limiting the Bank of England's scope for rate cuts. Sterling was last up to an intraday high of $1.3508 after the data from $1.3482 beforehand. The euro falls to a five-day low of 0.8603 pounds from 0.8630 pounds.
• Bitcoin was up 0.2% to $113,780 after reaching a low of $112,578 overnight, LSEG data show.
• Oil prices rose, recouping some ground lost in the prior session. Brent crude was up 1.05% at $66.48 a barrel and WTI rose 1.15% at $62.48 a barrel, though they are both down 4.1% and 5.4% on month, respectively. Oil's most recent gains follow a decline in inventories.

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