- U.S. stocks reported lower, dragged down by the sell-off in large technology stocks; The Treasury yield curve is steepening
- European stocks and government bonds were lower
- Asian equities are broadly downward
U.S. stocks fell, dragged down by a sell-off in technology stocks; The Treasury yield curve is steepening
U.S. stocks sold off on Wednesday as big tech stocks suffered a disappointing start to the earnings quarter. The S&P 500 fell 2.3%, while the tech-heavy Nasdaq fell 3.6%.
The United States Treasury yield curve has steepened due to risk-off sentiment, increased Fed rate cut expectations, weak economic data, poor five-year Treasury debt auctions and unaccepted offers for Treasury repurchases. The two-year Treasury yield fell 6 basis points to 4.43%, while the 10-year and 30-year yields rose 3 and 6 basis points to 4.28% and 4.54%, respectively.
European stocks reported lower on Wednesday amid some disappointing earnings results. The Dow Jones Europe 50 fell 1.1%, led by consumer discretionary and technology. Germany's DAX fell 0.9%, while France's CAC fell 1.1%. United Kingdom's FTSE 100 fell 0.2%.
European government bonds fell (with higher interest rates) and activity in the region stagnated, according to the results of a key PMI survey. Germany's 10-year government bond yield remained unchanged at 2.44%, while France's 10-year government bond yield edged up 2 basis points to 3.15%. United Kingdom 10-year government bond yields rose 3 basis points to 4.15%.
Asian stocks were broadly lower on Wednesday, following the weakness of United States markets overnight as investors assessed poor earnings from some major United States technology companies. Japan's Nikkei 225 index fell 1.1% as the yen's strengthening weighed on investors, while investors were nervous ahead of next week's Japan central bank's policy meeting. Korea's Kospi fell 0.6%. Hong Kong's Hang Seng Index and China's Shanghai Composite Index fell 0.9% and 0.5%, respectively. India's Sensex Index also fell 0.3% as investors continued to assess the FY25 federal budget to raise capital gains tax.
Oil prices rose on Wednesday, supported by a sharp decline in weekly crude and gasoline inventories in United States. United States oil prices rose 0.8% to $77.6 in September.
Key data announcements and market events
yesterday
The Eurozone composite PMI for July came in lower than expected, falling to 50.1 from 50.9 in June, as the slow expansion of the services sector failed to offset a broad-based decline in the manufacturing sector.
The United Kingdom Composite PMI was broadly in line with expectations, rising from 52.3 in June to 52.7 in July, with a continued modest recovery.
The United States Composite Purchasing Managers' Index edged up to 55.0 in July from 54.8 in June. In addition, new home sales fell 0.6% in June (month-on-month) and -11.3% (month-on-month) in May.
Economic data released today (25 July 2024)
Germany's IFO business climate index is expected to improve slightly to 88.9 in July from 88.6 in June.
United States GDP is forecast to edge up to 2.0% in the second quarter (annualized quarter-on-quarter) from 1.4% in the first quarter.
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