Australia

Australian shares are set to edge lower following a dip on Wall Street, as investors monitor earnings reports while awaiting inflation figures due later in the week.

ASX futures were down 40 points or 0.6% at 6891 as of 7:00am on Wednesday, pointing to a slip at the open.

U.S. stock indexes closed lower Tuesday as investors monitored earnings reports and economic data ahead of inflation figures due later in the week.

The S&P 500 slipped 17.59 points, or 0.4%, to 4122.47. The Dow Jones Industrial Average slid 58.13 points, or 0.2%, to 32774.41 while the technology-heavy Nasdaq Composite fell 150.53 points, or 1.2%, to 12493.93.

Investors await consumer-price data on Wednesday that could set expectations for how the Federal Reserve will approach monetary policy at its coming meetings. In recent weeks, better-than-expected corporate earnings and strong labor-market data have eased concerns about an imminent U.S. recession, helping stock markets rebound from their lows.

In commodity markets, Brent crude oil slipped 0.13% to $US96.52 a barrel while gold edged up 0.31% to US$1,794.47.

In local bond markets, the yield on Australian 2 Year government bonds rose to 2.68% while the 10 Year fell to 3.18%. Overseas, the yield on 2 Year US Treasury notes rose to 3.28% and the yield on the 10 Year US Treasury notes edges up to 2.79%. The yield curve remains inverted, a key recession indicator.

The Australian dollar hit 69.57 US cents down from the previous close of 69.84. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 98.13.

Asia

Chinese shares rose, supported by coal miners and renewable-energy sectors, while pharma stocks weighed. The Shanghai Composite Index gained 0.3% to 3247.43, extending a winning streak to the fourth session. Coal miners have advanced this week as domestic demand stabilized and the EU's import ban on Russian coal is set to begin, which could give global coal prices a lift, Guotai Junan Securities says in a note. Yankuang Energy jumped 5.3% and China Coal Energy strengthened 3.9%. Among losers, Shanghai Fosun Pharma lost 2.5% and Jiangsu Hengrui Medicine declined 2.0%. The Shenzhen Composite Index added 0.2% and the ChiNext Price Index was 0.7% higher.

Hong Kong's Hang Seng Index fell 0.2% to 20003.44 as tech stocks continued to trend down and auto makers fell despite strong sales data. Investors are staying on the sidelines amid the heightened geopolitical friction, KGI Securities says in a note. Fallout from last week's visit to Taiwan by US House Speaker Pelosi remains in focus. The Hang Seng Tech index extended Monday's weakness with a 0.9% decline. JD.com fell 3.7% and Meituan slid 2.0%, but Alibaba Group gained 0.9%. Great Wall Motor lost 2.8% despite an 11% rise in July vehicle sales volume, while Geely Automobile shed 1.7% though July sales grew 24%. Among the gainers, China Unicom rose 4.0% after 1H profit jumped 20%. Chinese Estates added 6.9% after guiding for 1H profit swing.

Japan's Nikkei Stock Average closed 0.9% lower at 27999.96 amid ongoing inflation worries. Main focus is very much on the U.S. CPI report due out Wednesday, said Michael Hewson, chief market analyst at CMC Markets, in an email, noting last Friday's bumper jobs report had boosted expectations that the Fed still has some way to go in raising rates. Among worst performers on the Nikkei, Tokyo Electron dropped 8.2% after its 1Q net profit fell 12% on year while Daifuku slid 7.1% on a 24.5% drop in its 1Q net profit. USD/JPY was at 135.02, compared with 135.21 as of Monday's Tokyo stock market close. The 10-year Japanese government bond yield was down 1bp at 0.160%

Europe

European stocks traded mostly lower after reports that Russian oil flows through a key pipeline to Central Europe were halted. The Pan-European Stoxx Europe 600 fell 0.7%, the German DAX slipped 1.1% while the French CAC 40 declined 0.5%.

"It's been a mixed day for European markets with the DAX rolling over on reports that oil flows through the Southern Druzhba pipeline which supplies Hungary, Czech Republic and Slovakia, had been suspended due to non-payment of transit fees," CMC Markets analyst Michael Hewson wrote.

The FTSE 100 closed down 0.1% on Tuesday as market observers look to the U.S. inflation print on Wednesday. "U.S. markets have dented confidence this afternoon, with the FTSE 100 providing the one area of strength in an otherwise tumultuous day for equities. The fears around another potential inflation-fuelled selloff in high multiple stocks has dented the likes of the Nasdaq in particular, with the recent earnings-based optimism starting to wane ahead of tomorrow's crucial U.S. inflation release," says Joshua Mahony, senior market analyst at online trading platform IG.

Abrdn was the day's biggest loser, ending down 6.8% after a swing to a first-half pretax loss.

North America

With inflation running at a multidecade high, investors say Wednesday's consumer-price index update will be key to the outlook for rates and the direction of the market.

"The market has enjoyed a risk-on environment since the lows of mid-June, and investors interpreted Chair [Jerome] Powell as more dovish than he had hoped at the last Federal Reserve meeting," said Quincy Krosby, chief global strategist for LPL Financial. "But today's market is tomorrow's market -- Wednesday's inflation data will provide a clearer picture as to whether this bear market is truly behind us."

Krosby said inflation is the No. 1 concern for the market -- not only whether it is subsiding, but how quickly.

Shares of Roblox, Coinbase Global, and Wynn Resorts all fell in after-hours trading following disappointing earnings results. Chip maker Micron Technology fell 3.7% Tuesday after issuing a revenue warning, just a day after Nvidia offered similar preliminary guidance.

Norwegian Cruise Line Holdings fell nearly 11% after reporting a wider-than-expected quarterly loss. Shares of peer cruise line Carnival Corporation fell 5.4% as pockets of the travel sector struggle to recover from the pandemic. Investors are keen to see results from Walt Disney Co., which are expected after Wednesday's close.

"Oil prices are still driven by the near-term macroeconomic outlook," said Robert Thummel, managing director and senior portfolio manager of TortoiseEcofin. "Concerns remain that the Federal Reserve will continue slowing the economy if Wednesday's inflation data comes in higher than expected, but markets still see persistent undersupply and high demand as creating upward pressure on oil prices.

Data released Tuesday showed U.S. labor productivity declined for a second straight quarter while labor costs were more elevated than economists expected