Australia

Australian shares are set to open flat, following Wall Street inching upwards on Wednesday. The major US indices gained under 1%, after Tuesday’s selloff, which was the S&P 500’s worst since June 2020.

ASX futures were mostly flat, up 2 points, or 0.02% at 6836 as of 7:00am on Thursday, pointing to a flat open.

US stocks inched higher after wobbling between small gains and losses Wednesday, coming off the prior day's wild trading spurred by a stronger-than-expected inflation report. The S&P 500 was up 0.3%, a day after the benchmark index plummeted 4.3% in its worst selloff since June 2020. The Dow Jones Industrial Average was up 0.1%, while the tech-focused Nasdaq Composite gained 0.7%.

On Wednesday, data measuring U.S. suppliers' prices also indicated elevated inflation. The producer-price index, which measures what suppliers are charging businesses and other customers, rose 8.7% in August from a year ago. On a monthly basis, the reading declined 0.1% from July, in line with economist expectations.

"We witnessed violent moves in the market yesterday as we reprice Fed and economic risk expectations," said Megan Horneman, chief investment officer at Verdence Capital Advisors. "Today we're absorbing such a destructive day."

In commodity markets, Brent crude oil rose 1.21% to $US94.3 a barrel, gold edged down 0.32% to US$1,696.76.

In local bond markets, the yield on Australian 2 Year government bonds rose to 3.01% while the 10 Year rose to 3.63%. Overseas, the yield on 2 Year US Treasury notes increased to 3.91% and the yield on the 10 Year US Treasury notes was up to 3.41%.

The Australian dollar hit 67.38 US cents, up slightly from the previous close of 67.28. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 101.38.

Asia

China stocks finished the session lower, snapping the slight recovery trend marked in recent days as global equities took a hit amid renewed worries over U.S. inflation and aggressive interest-rate increases by the Fed. The benchmark Shanghai Composite Index dropped 0.8% to settle at 3237.54, while the Shenzhen Composite Index lost 1.1% to 2100.90. The tech-heavy ChiNext Price Index was the worst performer, falling 1.8% to end at 2503.82. Chinese EV suppliers, including battery makers and chemicals producers, led the downturn, following a selloff in the EV sector on Wall Street overnight.

Hong Kong stocks ended the session sharply lower, with the benchmark Hang Seng Index shedding 2.5% to settle at 18847.10. That marked its worst one-day drop in more than two months. Exporters led the losses amid growing worries over U.S. consumer sentiment after the latest data suggested that inflation hasn't eased as much as hoped for. Techtronic Industries, which counts several major U.S. retailers among its clients, dived 10%, while Shenzhou International was down 2.8%.

Japanese stocks ended lower, dragged by falls in tech and electronics stocks, on fears of further aggressive tightening by the Fed to curb strong inflation. SoftBank Group lost 4.4% and Keyence dropped 5.1%. Meanwhile, Chugoku Electric Power lost 7.7% after it projected a record fiscal-year net loss, citing higher fuel costs. The Nikkei Stock Average fell 2.8% to 27818.62.

Europe

The pan-European STOXX Europe 600 Index is down 3.62 points or 0.86% to 417.51, the German DAX is down 160.95 points or 1.22% to 13028, while the French CAC 40 Index is down 23.28 points or 0.37% today to 6222.41.

Meanwhile, in London, the FTSE 100 closed down 1.5% as core inflation numbers continue to head in the wrong direction, AJ Bell analyst Danni Hewson said in a note. Although U.S. markets managed a slight rebound, with oil also experiencing a bounce, European markets fell behind as worries over a global recession and weak outlook for Europe spooked investors, IG analyst Chris Beauchamp said.

Scottish Mortgage Investment Trust was the day's biggest riser, closing up 2.4%, followed by Haleon and Pershing Square Holdings, up 1.4% and 1.1% respectively. Ocado was the biggest faller, closing down 8.2%.

North America

US stocks inched higher after wobbling between small gains and losses Wednesday, coming off the prior day's wild trading spurred by a stronger-than-expected inflation report.

The S&P 500 was up 0.3%, a day after the benchmark index plummeted 4.3% in its worst selloff since June 2020. The Dow Jones Industrial Average was up 0.1%, while the tech-focused Nasdaq Composite gained 0.7%.

The latest consumer-price index report released Tuesday spurred volatile moves across asset classes as investors curbed hopes that the Federal Reserve might slow its aggressive pace of interest-rate increases. The August inflation reading showed core prices, which excludes energy and food figures, accelerated from a year earlier -- indicating that broad inflationary pressures strengthened. That led traders on Tuesday to dump stocks across all sectors, sell bonds and cryptocurrencies, and push the U.S. dollar higher.

On Wednesday, data measuring U.S. suppliers' prices also indicated elevated inflation. The producer-price index, which measures what suppliers are charging businesses and other customers, rose 8.7% in August from a year ago. On a monthly basis, the reading declined 0.1% from July, in line with economist expectations.

"We witnessed violent moves in the market yesterday as we reprice Fed and economic risk expectations," said Megan Horneman, chief investment officer at Verdence Capital Advisors. "Today we're absorbing such a destructive day."

Among the top individual gainers in the S&P 500 at 4 p.m., Moderna shares climbed 5.6% after its chief executive told Reuters the company is open to supplying Covid vaccines to China.

Also making the index leaderboard, Starbucks rose 5.4% after the coffee chain raised its longer-term financial outlook. The company now sees adjusted earnings-per-share growth over the next three years of 15% to 20%, up from its previous forecast of 10% to 12%.

Shares of railroad operators declined as a possible freight labor strike looms. The White House is assessing how other transportation providers could fill potential gaps in the nation's freight network as labor unions and railroads continue contract talks. Union Pacific lost 4%, and CSX fell 1.4%.

Few market watchers were willing to suggest that volatile market moves may be in the rear-view mirror -- especially until the Fed's next meeting.

The Fed will make its next interest-rate policy decision next week. Federal-funds futures, used by traders to bet on interest-rate moves, showed a 72% chance that the central bank will lift rates by 0.75-percentage point. The data also show traders are assigning a 28% probability that the Fed will increase interest rates by 1 percentage point, according to CME Group data.

"The longer it takes for inflation to be tamed and for the Fed to back off on hiking rates, the lower the odds of the Fed being able to achieve a soft landing," said Eric Sterner, chief investment officer of Apollon Wealth Management, referring to a scenario in which the central bank slows the economy enough to curb inflation, but avoids triggering a recession. "We still have more pain that we're going to feel as investors and consumers over the next few months."