Australia

Australian shares are set for a modest advance as US stocks tumbled and bonds rallied amid a rout in technology shares and fresh economic data pointing to a slowing economy.

ASX futures were up 8 points or 0.1% at 7130 as of 8.00am AEST on Wednesday, pointing to a modest pop at the open.

Overseas, the S&P 500 fell 0.8%. The tech-heavy Nasdaq Composite slid 2.3%, with Alphabet dropping 5%, its worst one-day showing since October 2020. Facebook owner Meta Platforms fell 7.6%. Strength in defensive and cyclical names helped the Dow Jones Industrial Average rally near the closing bell to finish up 0.2%, after falling as much as 1.6% intraday.

Warnings about a worsening economy from social media company Snap spooked technology investors hoping for a bottom amid an accelerating share market rout. Snap's shares plummeted 43% after the company warned profits would be lower than expected and hiring would slow amid a deteriorating macroeconomic environment. Investors also digested data showing sales of new US homes fell to the lowest level since the pandemic in April, falling short of economist expectations in a sign higher rates are hitting the real economy.

"What's changed in the last few weeks is that the range of concerns has broadened so dramatically," said Eric Leve, chief investment officer at investment-management firm Bailard. "It was inflation that was front and center for everyone for so long. Now, it's far beyond that."

Locally, the S&P/ASX 200 closed 0.3% lower at 7128.8 as gains by the financial sector failed to offset weakness in most other sectors.

Banks ANZ, Westpac, Commonwealth and NAB gained between 0.2% and 1.0% but the benchmark index was unable to build on positive momentum from US equities.

Tech, industrial and retail stocks all fell amid risk-off sentiment illustrated elsewhere by weakness across most Asian currencies.

Every ASX 200 tech stock lost ground, led by Block's 7.3% decline. Nufarm dropped 15% after Sumitomo Chemical said it was selling its stake in the agricultural chemical firm.

Pushpay jumped 15.6% to a five-month high of $1.295 after the Auckland-based online donor management solution for US churches said it was exploring multiple takeover offers.

Tabcorp spin-off The Lottery Corporation made its debut on the ASX under the ticker code TLC, with its shares closing at $4.70.

Tabcorp itself was down $4.285, or 83%, to $1.055, as those shares no longer include Tabcorp's keno or lottery businesses.

In commodity markets, Brent crude oil rose 0.4% to US$113.90 a barrel. Iron ore fell 4% to US$130.50. Gold was flat at US$1870.50.

In local bond markets yield on Australian 2 Year government bonds slipped to 2.46% while the 10 Year dipped to 3.31%. Bonds rallied overseas amid equity weakness and yield on US Treasury 2 Year notes declined to 2.48%, while the 10 Year fell to 2.75%. Yields fall as prices rose.

The Australian dollar traded at 71.06 US cents as of 7.00am AEST, down from the previous close of 71.08 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies declined again to 94.50.

Asia

Chinese stocks ended lower despite several economic stimulus measures unveiled by Beijing late Monday. The market may continue to suffer some fluctuations in the near term, as a clear economic recovery path has not emerged yet, Central China Securities analysts said in a note. However, the brokerage expects an overall rebound in the long run as China gradually loosens its pandemic curbs. The benchmark Shanghai Composite Index fell 2.4% to settle at 3070.93, the Shenzhen Composite Index closed 3.6% lower at 1922.48. The tech-heavy ChiNext Price Index was the worst performer, losing 3.8% to end at 2318.07. Construction contractors, engineering firms and iron-ore miners led the losses.

Hong Kong stocks ended lower as selling pressure continued to mount after a rebound last week. The downturn was in line with losses in the China market, as investors remained cautious despite Beijing's latest plans for economic stimulus. The benchmark Hang Seng Index fell 1.7% to settle at 20112.10. Losses were spread across a mixed bag of sectors, with casino operator Sands China dropping 7.5% to turn in the worst performance on the index. EV maker BYD fell 5.8% and real-estate manager Country Garden Services lost 5.6%.

Japanese stocks ended lower, dragged by falls in tech and electronics stocks as concerns persist about slower economic growth and higher operations costs. Recruit Holdings lost 6.6% and Renesas Electronics dropped 5.0%. The Nikkei Stock Average fell 0.9% to 26748.14. Investors remained focused on President Biden's trip to Tokyo and any implication that will have on global trade.

Europe

European markets dropped amid downbeat equity and economic news. The pan-European Stoxx Europe 600, French CAC 40 and German DAX fell more than 1%.

"Markets in Europe have given back some of yesterday's gains, weighed down by further evidence of economic weakness in the form of a big earnings downgrade from US social-media company Snap and lackluster PMI reports, suggesting rising prices are reducing profits and demand," CMC analyst Michael Hewson says.

London’s FTSE 100 ended Tuesday down 0.39%, holding close to its bounce the day before, as other markets saw greater losses.

"It is back to normal service for equities, as the great market selloff of 2022 gets going once again," IG Group PLC chief market analyst Chris Beauchamp says.

It should be clear by now to even the most enthusiastic buyer that markets aren't going to bounce any time soon, but in contrast to most indices the FTSE 100 has held relatively firm, Beauchamp says. "It has rarely been a better time to be an index dominated by commodity-linked stocks, which once again have held the pass while almost every other index heads sharply into the red," Beauchamp says.

North America

US stock indexes ended mostly lower and a selloff in technology stocks deepened as concerns about economic growth and rising interest rates continued to weigh on markets.

The S&P 500 fell 0.8%. The tech-heavy Nasdaq Composite slid 2.3%, with heavyweight Alphabet dropping 5%, its worst one-day showing since October 2020. Facebook owner Meta Platforms fell 7.6%. Strength in defensive and cyclical names helped the Dow Jones Industrial Average rally near the closing bell to finish up 0.2%, after falling as much as 1.6% intraday.

All three of the major indexes had fallen more deeply into the red on Tuesday morning as downbeat reports about home sales and corporate outlooks deepened investors' gloom. Stocks recovered somewhat later in the day, but investors said that finding good reasons to jump into the market remained an uphill battle as negative signs about the economy's health mount.

"What's changed in the last few weeks is that the range of concerns has broadened so dramatically," said Eric Leve, chief investment officer at investment-management firm Bailard. "It was inflation that was front and center for everyone for so long. Now, it's far beyond that."

As the Federal Reserve geared up to tackle searing inflation, its plans to raise interest rates were the first in a series of spooks that markets have endured in 2022. More recently, while a difficult year on Wall Street wears on, war in Ukraine, high food and energy costs and a spattering of tepid outlooks from big companies have kept investors on edge.

"Normally the catalyst of the turnaround is the Fed," said Russ Koesterich, who co-manages a global-allocation fund for BlackRock. "This time around, it's obviously harder for the Fed to ride to the rescue given the fact that they have a lot of work to do to bring inflation down."

Weighing on investors Tuesday was a profit and revenue warning from social-media company Snap a day earlier that soured sentiment about the tech sector. The disappointing report Tuesday showing slower US new-home sales in April further dimmed the mood.

Snap's shares plummeted $9.68, or 43%, to finish at $12.79 on Tuesday as investors digested its comments that the macroeconomic environment has deteriorated more than expected. Worries about disruptions to Snap's advertising revenue rippled to other tech stocks that have been battered this year.

Meanwhile, the home-sales data, well below economists' expectations, is another sign that the Fed's interest-rate increases are already slowing the real economy, said Steven Ricchiuto, the chief economist for Mizuho Securities USA.

"It's a pretty weak number," he said, saying the trend is a sign that more home buyers are getting squeezed out of the market as the interest rates on mortgages increase.

Worries about slowing growth amid higher inflation have helped send the S&P 500 falling 18% through Tuesday from its January high. Investors have been fretting about whether the S&P 500 will enter bear-market territory, defined as a drop of at least 20% from a recent high. On Friday, the benchmark index came close to finishing in a bear market before it was saved by a late-session rally.

On Tuesday, as big tech companies took a drubbing, stocks with more of a foothold in the physical economy sustained narrower losses or even gained ground. S&P 500 sectors such as consumer staples, energy and real estate finished in positive territory.

Tim Courtney, chief investment officer at Exencial Wealth Advisors, took that as a sign that inflation, and the Fed's response, remained a bigger worry for many investors than the economy's fundamental health.

Wealth-management clients had been taking the stock market's downturn in stride this year, but as bear-market levels have approached for the S&P 500, their fear has built, Mr. Courtney said.

"The last week, as we've approached that magical bear-market barrier, I think the concerns started rising," he said.

Tuesday's selloff in technology stocks sent investors scooping up government bonds, with the yield on the benchmark 10-year US Treasury note falling to 2.758% from 2.857% Monday. A bond's yield falls when its price rises.

BlackRock's Mr. Koesterich said that turbulent trading across both stock and bond markets this year has led his team to hold more cash in the fund's portfolio.

"The volatility in rates markets has been a lot of the cause of the volatility in stock markets," he said. "In that environment, cash becomes one of the most effective risk mitigants."

Disappointing earnings and warnings across the corporate landscape have exacerbated the fears. Abercrombie & Fitch became the latest retailer Tuesday to dent investor sentiment after it swung to a first-quarter loss amid higher costs. The company's shares were down $7.64, or 29%, landing at $19.09.

Mizuho's Mr. Ricchiuto warned that as more analysts come to terms with the Fed's strong resolve to control inflation, Wall Street's expectations for corporate earnings could further weaken, sending stock prices even lower.

Despite Tuesday's broad technology selloff, there were bright spots in the market. Zoom Video Communications climbed $5.01, or 5.6%, to $94.34 after the videoconferencing-services company raised its profit outlook.