Australia

Australian shares are set to open lower, after US stocks fell sharply on Tuesday.

ASX futures were down 1.2% or 92 points as of 8:00am on Wednesday, suggesting a lower open.

US stocks ended their worst month of the year on another low note.

The S&P 500 fell 1.6% on Tuesday. The Nasdaq Composite lost 2%, while the Dow Jones Industrial Average shed 570 points, or 1.5%.

In commodity markets, Brent crude oil was down 0.6% to US$87.86 a barrel, while gold was down 2.1% at US$2,286.25.

In local bond markets, the yield on Australian 2 Year government bonds was down at 4.09% while the 10 Year yield was also down at 4.42%. US Treasury notes were up, with the 2 Year yield at 5.04% and the 10 Year yield at 4.68%.

The Australian dollar was 64.72 US cents, up from its previous close of 64.71. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.80.

Asia

Chinese shares ended lower as investors digested the country's latest batch of factory activity. China's official April PMI fell to 50.4 from 50.8 in March, implying slower expansion. Among major stocks, Midea added 2.3%, and Gree Electric Appliances was 4.0% higher. Decliners include SMIC, which was 2.65% lower, and BYD, which dropped 1.3%. The benchmark Shanghai Composite Index closed 0.3% lower at 3104.28, the Shenzhen Composite Index dropped 0.7% and the ChiNext Price Index slipped 1.55%.

Hong Kong's Hang Seng Index edged 0.1% higher to close at 17763.03, led by manufacturing-related stocks. Investors need to digest China's PMI data, which gave a mixed picture of the country's economic recovery, while markets are actively looking for signs that the worst is over given the current weak sentiment, IG Market Analyst Yeap Jun Rong writes in a commentary. The Hang Seng Index is "a touch away from bull-market territory," Yeap adds. Among the advancers, Haier Smart Home jumped 7.9%, Techtronic Industries rose 3.8% and Shenzhou International Group gained 2.6%. Among the decliners, Sino Biopharmaceutical lost 3.9%, Country Garden Services fell 3.1% and Bank of China was 2.75% lower.

Japanese stocks ended higher, led by gains in electronics, machinery and auto stocks, as hopes continue for earnings growth despite uncertainty over the Fed's policy outlook. Mitsubishi Electric surged 16% after it projected a 10.5% increase in fiscal-year net profit. Komatsu climbed 12% and Hitachi Ltd. advanced 8.5%. The Nikkei Stock Average rose 1.2% to 38405.66. Earnings remain in focus along with the U.S. central bank's two-day policy meeting due to start later in the day. The 10-year Japanese government bond yield was down 5 basis points to 0.870%.

India's benchmark Sensex ended 0.25% lower at 74482.78, as investors kept a cautious stance ahead of the U.S. Federal Reserve's meeting and press conference on Wednesday for hints about interest rate moves. Among advancers, Bajaj Finance added 1.5% and Tata Motors gained 0.9%. Decliners included ICICI Bank, which was down 0.8%; HDFC Bank, which fell 0.8%; and Wipro, which dropped 0.1%.

Europe

Stocks in the U.K. were flat Tuesday, as the FTSE 100 Index held steady at 8144.13. Among large companies, Zegona Communications PLC was the biggest gainer during the session, gaining 4.5% to GBP230.00, and HSBC Holdings PLC (UK Reg) gained 4.1% to GBP695.60. Whitbread PLC rounded out the top three movers on Tuesday, as shares gained 3.9% to GBP3,167.00. Serica Energy PLC posted the largest decline, dropping 7.6% to GBP186.00, followed by shares of Oxford Nanopore Technologies PLC, which dropped 5.6% to GBP98.35. Shares of Fresnillo PLC dropped 5.5% to GBP558.00.

European stock indexes ended lower, with Germany's DAX and France's CAC 40 down 1.0%, and the Stoxx Europe 600 slipping 0.7%.

North America

US stocks ended their worst month of the year on another low note.

The S&P 500 fell 1.6% on Tuesday. The Nasdaq Composite lost 2%, while the Dow Jones Industrial Average shed 570 points, or 1.5%.

All 11 S&P 500 sectors finished the day in the red. The broad index fell 4.2% in April, its worst performance since September, after posting its best first-quarter performance since 2019. The Nasdaq and Dow dropped 4.4% and 5%, respectively, for the month.

The Federal Reserve's campaign to lower inflation still has a way to go, fresh data on worker compensation suggested Tuesday. The Labor Department's employment-cost index rose by a seasonally adjusted 1.2% in the first quarter from the previous three months, and 4.2% from a year earlier.

"The market is obviously not taking the wage pressure well," said John Lynch, chief investment officer at Comerica Wealth Management. The data, he said, "completely gets the inflation discussion back on the table."

It was the latest piece of data suggesting that inflation is still running hotter than the central bank would prefer. Consumer prices have increased more than Wall Street had expected for three months in a row.

That trend has dimmed Wall Street's hopes for interest-rate cuts in the near future. Investors entered the year expecting as many as six cuts in 2024, and now many doubt there will be any cuts at all.

Fed officials are expected to hold their benchmark federal-funds rate steady at its highest level in more than two decades at its policy meeting, which concludes Wednesday. On Friday, April jobs data will offer a fresh look at the state of the labor market.

The benchmark 10-year Treasury yield settled at 4.683% Tuesday, up from 4.612% Monday and 4.192% on March 28. It was the largest monthly increase in yields since September 2022. Bond prices fall when yields rise.

Earnings season has been a relatively bright spot amid the recent gloom. S&P 500 companies are growing first-quarter earnings by 3.9%, according to FactSet, when blending actual results with analysts forecasts. About 53% of companies within the index had reported results as of Tuesday morning.

Amazon.com, the latest of the Magnificent Seven tech stocks to report, announced profits that topped expectations after markets closed Tuesday. Apple's results are due Thursday afternoon.

"I would say across the board that earnings season has been good enough to support and justify where we are," said Nicole Webb, senior vice president and financial advisor at Wealth Enhancement Group.

Eli Lilly rose 6% after the maker of popular weight-loss drugs increased its full-year profit outlook. 3M rose 4.7% after announcing it would scrap its quarterly dividend.

GE HealthCare Technologies fell 14% after earnings, its worst single-day performance since its 2022 stock-market debut.