Australia

Australian shares are set to open higher, after US stocks continued their losing streak.

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

US stocks fell Wednesday, deepening an April selloff, after investors largely abandoned their expectations of imminent interest-rate cuts.

The S&P 500 fell 0.6%, marking a fourth straight session of declines. The Nasdaq Composite shed 1.1%. The Dow Jones Industrial Average dipped 0.1%, or 46 points.

In commodity markets, Brent crude oil was down 2.9% to US$87.40 a barrel, while gold was down 0.9% at US$2,361.02.

In local bond markets, the yield on Australian 2 Year government bonds was up at 3.99% while the 10 Year yield was also up at 4.38%. US Treasury notes were down, with the 2 Year yield at 4.93% and the 10 Year yield at 4.59%.

The Australian dollar was 64.33 US cents up from its previous close of 63.99. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 100.33.

Asia

Chinese shares closed higher, supported by small-cap stocks. CSI 2000, a gauge for Chinese small-cap stocks, surged 6.7% after Chinese regulators downplayed the delisting concerns following the country's new guidelines for the capital markets last week. Tech and semiconductor stocks led the gains. Beijing Kingsoft Office Software gained 1.5% and iFlyTek was 3.3% higher. Hygon Information Technology rose 2.8% and Will Semiconductor climbed 5.2%. Among small-cap stocks, CECEP Environmental Protection advanced 9.45% and Tonghua Golden-Horse Pharmaceutical Industry added 5.2%. The benchmark Shanghai Composite Index ended 2.1% higher at 3071.38, the Shenzhen Composite Index rose 3.8% and the ChiNext Price Index gained 2.1%.

Hong Kong's Hang Seng Index closed flat at 16251.84, as investors digested Fed Chair Powell's comments on inflation and the mixed economic data out of China. There are some concerns regarding China's "underlying weakness in domestic demand and industrial activity," signaling the country's continued struggle with economic growth, said Sonija Li, Maybank Investment Bank's head of retail research, in a note. Among advancers, WuXi AppTec gained 4.9%, Li Auto rose 4.0% and China Resources Power was 2.7% higher. Meanwhile, Galaxy Entertainment shed 7.1%, New World Development fell 6.8% and Henderson Land Development was 3.7% lower.

Japanese stocks ended lower, dragged by falls in financial and chip-related stocks as uncertainty over Fed policy and tensions in the Middle East weighed on the market. Nomura Holdings dropped 2.0% and T&D Holdings lost 3.5%. Lasertec slumped 7.9% and Advantest shed 4.5% after ASML Holding's 1Q orders missed analysts' expectations. The Nikkei Stock Average fell 1.3% to 37961.80. The 10-year Japanese government bond yield was up 2 basis points at 0.885%. Investors are focused on developments in the Middle East.

Indian shares ended lower, following their Asian peers, dragged by worries over geopolitical tensions in the Middle East. The benchmark Sensex lost 0.6% to 72943.68. Finance and bank stocks led losses. IndusInd Bank and Bajaj Finserv were down 3.1% and 2.3%, respectively. Among the few gainers, Zee Entertainment was in the lead, rising 4.05%. Titan Co. and Hindustan Unilever were up 1.3% and 1.2%, respectively.Jio Financial Services was 2.1% higher after media reports of a joint venture with BlackRock for wealth management in India. Investors are also waiting for U.S. home sales data due later this week.

Europe

European shares closed moderately higher on Wednesday, with the pan-European Stoxx Europe 600 up 0.06% to 498.52, the CAC 40 gaining 0.6% to 7,981.51 and Germany's DAX adding 0.02% to 17,770.02.

The FTSE 100 closed up 0.35% Wednesday--breaking a two-trading day losing streak--as U.K. inflation fell to 3.2%, its lowest level since September 2021, and slightly ahead of expectations. "While it is yet to reach a new all-time high in 2024, unlike headline stock indices in America, Australia, Canada, France, Germany and Taiwan... the FTSE 100 is again flirting with the 8,000 mark and sits tantalizingly close to the peaks reached in February 2023," AJ Bell analyst Russ Mould said in a note. Anglo American, Fresnillo and Antofagasta were the session's highest risers, up 3.5%, 2.9% and 2.8% respectively. Segro led the fallers and was down 2%, followed by Phoenix Group and Sage Group, down 1.8% and 1.7% respectively.

North America

US stocks fell Wednesday, deepening an April selloff, after investors largely abandoned their expectations of imminent interest-rate cuts.

The S&P 500 fell 0.6%, marking a fourth straight session of declines. The Nasdaq Composite shed 1.1%. The Dow Jones Industrial Average dipped 0.1%, or 46 points.

The S&P 500's losing streak is its longest since the first week of 2024. And for the third consecutive session, the index rose in early trading before closing lower, the longest streak of such reversals since 2022.

Stocks rallied sharply to start the year, due in part to widespread expectations that the Federal Reserve would move to lower interest rates at some point in 2024. The S&P 500 had its best first quarter since 2019.

But the script has flipped in April. A persistently strong economy led Fed Chair Jerome Powell and other central bank officials to cast doubt on that assumption earlier this week.

"We had forecast two rate cuts this year, now we're at just one in December, which is very different from what markets had expected" at the start of the year, said Sinead Colton Grant, chief investment officer at BNY Mellon Wealth Management.

Traders in interest-rate derivatives are pricing in a 16% chance that the Fed will lower its policy rate at its June meeting, according to CME Group's FedWatch tool. A month ago, the likelihood of a cut was 55%.

Investors have responded by pushing bond yields higher and prices lower, which has pressured stocks. All three major indexes are down 4% or more so far this month.

But the S&P 500 and Nasdaq are still solidly green for the year, and investors aren't ready to give up on the bull market.

"We think the market is way overreacting," said Tony Roth, chief investment officer at Wilmington Trust. "If we had 15 basis points less in CPI, we'd have a totally different narrative right now," he said, referring to this month's hotter-than-expected consumer-price index.

He said he expects the PCE price index, the central bank's preferred inflation gauge, to show comparatively light inflation for March when that data is released April 26.

"When we think about equities overall, this is on balance probably a better buying opportunity after some consolidation," said BNY Mellon's Grant.

The benchmark 10-year Treasury yield settled at 4.584%, down from 4.657% Tuesday.

Chip stocks fell, continuing a recent slide for a sector that has shined over the past year. The PHLX Semiconductor Index declined 3.2% and has shed 6.9% for the month.

United Airlines stock rose 17%, the S&P 500's top performer, after the carrier reported stronger-than expected quarterly results. Rivals also enjoyed a boost: American Airlines Group gained 6.6%, while Southwest Airlines advanced 2.6%.

The worst performer in the S&P 500 was J.B. Hunt Transport Services, which fell 8.1% after reporting weak results.