Australia

Australian shares are set to rise at market open despite a mixed day on Wall Street, with increased retail sales stoking fears of more rate rises.

ASX futures were up 0.3% or 20 points as of 8:00am on Wednesday, suggesting a higher open.

US stocks ended narrowly mixed after September retail sales increased more than expected, raising worries the Fed may keep rates higher for longer. Treasury yields climb to their highest level since July 2007 following the report.

US government bond yields hit fresh decade-plus highs Tuesday after another hot economic-data release fueled concerns that interest rates could remain elevated for longer.

The latest retail-sales report showed spending online, at stores and in restaurants rose a stronger-than-expected 0.7% in September from a month earlier. Treasury yields jumped afterward, with the benchmark 10-year bond yield rising to 4.846%, up from 4.709% Monday. It was the highest closing level since July 2007.

Stocks wavered between gains and losses before closing little changed. The S&P 500 fell less than one-tenth of a percent, while the Dow Jones Industrial Average added less than a tenth of a percent. The Nasdaq Composite was 0.3% lower.

In commodity markets, Brent crude oil rose 1.4% to US$90.89 a barrel while gold was flat at US$1,923.12.

In local bond markets, the yield on Australian 2 Year government bonds was higher at 4.16% while the 10 Year yield was also up at 4.54%. US Treasury notes were higher, with the 2 Year yield at 5.21% and the 10 Year yield at 4.83%.

The Australian dollar hit 63.65 US cents up from the previous close of 63.40. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was flat at 100.37.

Asia

Chinese stocks closed lower as semiconductor shares weighed. The declines came amid a Bloomberg report saying that the US could further restrict China's access to advanced chip tech. Semiconductor Manufacturing International Corp. lost 2.7% and LONGi Green shed 1.75%. Consumer services stocks were also broadly lower, with China Tourism Group Duty Free losing 2.4%. Concerns about the economy also lingered. Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note that Beijing not only lacks a convincing plan to offset the persistent drag from the property sector drag, it faces mounting challenges from credit constraints, falling confidence and capital outflows. Energy stocks rose on surging oil prices, with PetroChina up 1.7%. The benchmark Shanghai Composite Index fell 0.5% to 3073.81, the Shenzhen Composite Index lost 1.1% and the tech-heavy ChiNext Price Index slid 2.0%.

Hong Kong shares closed higher as investor sentiment was boosted by diplomatic efforts to contain the Israel-Hamas conflict. Meanwhile, China's economy has shown nascent signs of bottoming out after September economic data signaled steady growth momentum, Maybank analyst Sonija Li says in a research note. Technology and financial stocks led the gains. Xiaomi advanced 4.0% and Xinyi Solar climbed 3.1%. Hong Kong Exchanges & Clearing rose 1.5% and Citic Securities was 1.4% higher. Consumer-durable stocks weighed on the market, with Li Ning losing 1.5%. The benchmark Hang Seng Index closed 0.75% higher at 17773.34. The Hang Seng Tech Index gained 0.6%.

Japanese stocks ended higher, led by gains in game and tech stocks as initial fears about an escalating conflict in the Middle East ebb for now. Bandai Namco gained 4.6% and Recruit Holdings climbed 3.1%. The Nikkei Stock Average rose 1.2% to 32040.29. Investors are focused on the latest developments in the war between Hamas and Israel and their impacts on crude-oil prices and bond yields. The 10-year Japanese government bond yield rises 3 bps to 0.780%.

Indian shares closed higher, led by tech and bank stocks. The benchmark Sensex rose 0.4% to 66428.09, tracking most regional peers. Haven bids retreated as the US government made diplomatic efforts in the Middle East, although risks remain amid warnings from Iran, Charu Chanana, a market strategist at Saxo said in a report. Investors are eyeing US retail sales data and the upcoming earnings season, she added. Tech and bank stocks led the gains on the Sensex as Kotak Mahindra Bank and Tech Mahindra both rose 1.2%. Bajaj Finserv and ITC advanced 1.0% each. Tata Motors led the losses as it dropped 1.55% and Larsen & Toubro shed 1.2%.

Europe

European markets mostly rose as gains for luxury-goods, drug, oil and financial shares offset losses for telecom and property stocks. The DAX and CAC 40 edged 0.1% higher, though the pan-European Stoxx Europe 600 dropped 0.1%. Ericsson, Nokia and BT are among the biggest pan-European fallers and German and Nordic property stocks also retreated. Still, Brunello Cucinelli, Hugo Boss and Watches of Switzerland gained, while Polish banks and other financials made progress. Asos advanced 2% after Mike Ashley's Frasers Group increased its stake in the online retailer.

The FTSE 100 closed Tuesday up 0.6% to 7675 points, outperforming European peers supported by the health care and energy sectors, alongside a slightly weaker pound, CMC Markets U.K. chief market analyst Michael Hewson says in a note. Shares of Anglo-Swedish pharma heavyweight Astrazeneca outperformed the index, closing up 2.7% after its North American peer Johnson & Johnson upgraded their full year sales view, Hewson said. BP and Shell shares closed up 1.1% and 0.8%, respectively, driven expectations of higher-for-longer energy prices, he adds. Retail-investment platform Hargreaves Lansdown was the index worst performer, down 2.3%.

North America

US stocks ended narrowly mixed after September retail sales increased more than expected, raising worries the Fed may keep rates higher for longer. Treasury yields climb to their highest level since July 2007 following the report.

US government bond yields hit fresh decade-plus highs Tuesday after another hot economic-data release fueled concerns that interest rates could remain elevated for longer.

The latest retail-sales report showed spending online, at stores and in restaurants rose a stronger-than-expected 0.7% in September from a month earlier. Treasury yields jumped afterward, with the benchmark 10-year bond yield rising to 4.846%, up from 4.709% Monday. It was the highest closing level since July 2007.

Stocks wavered between gains and losses before closing little changed. The S&P 500 fell less than one-tenth of a percent, while the Dow Jones Industrial Average added less than a tenth of a percent. The Nasdaq Composite was 0.3% lower.

Higher bond yields are pushing up borrowing costs for companies, individuals and home buyers. But US consumers are still on a spending binge that has helped sustain the economy.

Economic indicators have repeatedly surprised to the upside in recent weeks, prompting bond traders to reset expectations for how long the Federal Reserve will keep its monetary policy restrictive.

"The Fed certainly won't like that higher rates are not deterring consumers from spending," said Gina Bolvin, president of Bolvin Wealth Management Group.

There is a plausible story that inflation is moving toward the Federal Reserve's 2% target, Richmond Fed President Tom Barkin said in remarks released before a Tuesday speech in Washington. The Federal Reserve still has time to determine whether another rate hike is necessary, he added.

Some investors expect higher long-term bond yields to help the Fed cool inflation without further rate increases.

"If you read the tea leaves from the Fed statements, they feel like the bond market is doing a little bit of the work for them," said Jason Vaillancourt, global macro strategist at Putnam Investments.

Investors are also weighing the impact of a spate of Wall Street earnings and the Israel-Hamas war. Markets got a boost Monday on optimism that conflict in the Middle East had yet to escalate into a broader geopolitical crisis, after investors had piled into safer assets before the weekend.

"There's hope that the US and some of its European counterparts can keep this from spiraling and potentially drawing Iran in. But I don't think anyone in markets has a good way to price that," Vaillancourt said.

Oil prices rose. Brent crude, the global oil benchmark, closed slightly higher at $89.90 a barrel.

In earnings, Goldman Sachs and Bank of America both beat estimates for third-quarter earnings and revenue. Johnson & Johnson raised its full-year sales guidance and Lockheed Martin said it expected to increase sales this year despite the budget battle that has hit the Pentagon.

Chipmaker shares came under pressure after the Commerce Department said it would significantly constrict exports of artificial-intelligence chips, making it tougher for companies like Nvidia and Intel to sell products in China. Nvidia closed down 4.7%.

Moderna shares fell sharply for a second day after the vaccine maker warned Monday that there is uncertainty over US vaccination rates, making projections difficult. Moderna was the S&P 500's worst performer, dropping 6.1%.

VF, the owner of brands including Vans and The North Face, surged 14% higher after The Wall Street Journal reported that activist investor Engaged Capital has built a stake in the company and plans to push for changes, including steep cost cuts.