Australia

Australian shares are expected to fall this morning following a poor session in the US. While major retailers reported weak earnings, investors worried about the outlook for the US consumer. Meanwhile, Asian stocks managed to rebound slightly from their recent downturn.

ASX futures were 21 points or 0.3% lower as of 6:00am on Wednesday, suggesting a stumble at the open.

US stocks edged lower Tuesday after disappointing earnings reports from retailers cast doubt on the strength of the US consumer.

The cautionary signals landed on a market focused on two events later this week: Wednesday's quarterly report from Nvidia, which could test investors' faith in the artificial-intelligence trade, and Friday's speech from Federal Reserve Chairman Jerome Powell, which could hold clues to the path of interest rates.

The S&P 500 declined 0.3%, while the Dow Jones Industrial Average retreated 0.5%, or 175 points. The Nasdaq Composite added 0.1% as tech heavyweights including Apple and Microsoft defied the downdraft. Canadian stocks tumbled, with the S&P/TSX Composite falling 0.5%.

In commodity markets, Brent crude oil dropped 0.5% to US$84.08 a barrel while gold edged up 0.2% to US$1,897.88.

The yield on 2 Year Australian government bonds remained at 3.93% while the 10 Year yield edged up to 4.27%. US Treasury notes were higher, with the 2 Year yield rising to 5.04% and the 10 Year yield advancing to 4.32%.

The Australian dollar climbed to 64.22 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, rose to 98.30.

Asia

Chinese shares ended higher on a technical rebound from their selloff after the central bank lowered its benchmark lending rates by less than expected Monday. The rest of the week is expected to be quiet on the domestic data front. Telecoms and software makers led the gains Tuesday. China Mobile added 3.2% and China Telecom rose 5.5%. iFlytek increased 2.5% and Yonyou Network Technology added 4.1%. Pharmaceutical companies and consumer brands weighed on the market. Shanghai United Imaging Healthcare declined 13% and Shanghai United Imaging Healthcare dropped 2.5%. The benchmark Shanghai Composite Index ended 0.9% higher at 3120.33. The Shenzhen Composite Index rose 0.5% and the tech-heavy ChiNext Price Index gained 0.1%.

Hong Kong shares closed higher after a recent selloff amid concerns about China's slow economic growth and debt-ridden property sector. The benchmark Hang Seng Index, which rose 1.0% to 17791.01, ended a seven-session losing streak. Investors were looking toward the US Federal Reserve's annual symposium later this week to watch for any hint that the end of the rate hike cycle is near. Retail and technology stocks led the gains. Zhongsheng Group Holdings rose 5.9% and Alibaba Health Information Technology climbed 2.8%. Hansoh Pharmaceutical Group closed 4.5% higher. Consumer-goods stocks weighed on the market, with Li Ning shedding 3.25% and Anta Sports Products losing 1.0%. The Hang Seng Tech Index rose 2.0%.

Japanese stocks ended higher, led by gains in banks as long-term government bond yields climbed. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group advanced 3.2% each. The Nikkei Stock Average rose 0.9% to 31856.71. The 10 Year Japanese government bond yield was up by 1.5 basis points to 0.665%, reaching its highest level since January 2014, while the 2 Year yield was down half-a-basis point at 0.020%.

India's benchmark Sensex index closed flat at 65220.03, erasing earlier gains amid caution ahead of this week's Jackson Hole Economic Symposium, at which Federal Reserve Chair Jerome Powell is slated to speak. At this point, hawkish Fed rate expectations are mostly priced in, but there could still be some scope for up and down moves in stock markets, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in an email. Among the top performers on the benchmark index were NTPC Ltd., which rose 1.3%, and Mahindra & Mahindra, which added 0.75%. Meanwhile, Jio Financial Services fell 5.0% and Bajaj Finserv shed 0.75%.

Europe

European stocks rose as investors eyed merger and acquisition activity in the software sector. The pan-European Stoxx Europe 600 and the German DAX both gained 0.7% while the French CAC 40 climbed 0.6%. Property stocks and Ubisoft Entertainment were among the biggest pan-European risers.

"Having spent most of yesterday treading water, European markets have tried to make cautious progress higher today," CMC Markets analyst Michael Hewson wrote. Hewson said the gains have come about after Microsoft offered to cede most cloud-streaming rights for Activision games--including its hit franchise "Call of Duty"--over the next 15 years to rival games giant Ubisoft Entertainment as it looks to get its Activision acquisition past UK regulators.

London's FTSE 100 index ended its first session in the green since Aug. 10. The British benchmark gained 0.2% to 7,270.76 points at market close on Tuesday, lifted by mining stocks. "The gains in the mining sector appeared to be helped by a sudden late rebound in Chinese markets," Michael Hewson wrote, noting that the turnaround seems sudden and suggests the possibility of intervention from Chinese authorities. Fresnillo closed up 5.5%, leading the blue-chip index, while Glencore and Antofagasta gained 2.3% and 2.1%, respectively.

North America

US stocks edged lower Tuesday after disappointing earnings reports from retailers cast doubt on the strength of the US consumer.

The cautionary signals landed on a market focused on two events later this week: Wednesday's quarterly report from Nvidia, which could test investors' faith in the artificial-intelligence trade, and Friday's speech from Federal Reserve Chairman Jerome Powell, which could hold clues to the path of interest rates.

The S&P 500 declined 0.3%, while the Dow Jones Industrial Average retreated 0.5%, or 175 points. The Nasdaq Composite added 0.1% as tech heavyweights including Apple and Microsoft defied the downdraft. Canadian stocks tumbled, with the S&P/TSX Composite falling 0.5%.

"Investors are unwilling to make any major bets in advance of the Powell Jackson Hole speech on Friday morning," said Matthew Palazzolo, senior investment strategist at Bernstein Private Wealth Management. "I'm not surprised we're seeing some sideways action."

Tuesday's earnings reports from Dick's Sporting Goods and Macy's sent those shares tumbling and raised questions about consumer spending more broadly. Dick's shares plunged 24% after the sporting-goods chain slashed its profit targets and said thefts of merchandise had been higher than expected.

Macy's shares fell 14% after the department-store chain reported that consumers bought fewer goods at its stores and delinquencies rose among its credit-card holders.
Investors said the pullback by consumers could have repercussions far beyond the retailers' results.

"As consumers' dollars don't go as far and they buy lower volumes of things, the whole economy slows down," said Lauren Hill, co-portfolio manager of the Westwood Quality Value Fund.

The declines for stocks were broad-based, with seven of the S&P 500's 11 sectors and 20 of the 30 stocks in the Dow Jones industrials retreating.

Concerns about consumer spending helped pull Nike shares lower for a ninth TK consecutive day, their longest losing streak ever, according to Dow Jones Market Data.

Markets have been fixated this year and last year on the central bank's campaign to tame price pressures by lifting interest rates. Inflation is now much lower than at its recent heights but remains above the Fed's 2% target.

Money managers will scrutinize Powell's remarks Friday for signs of how committed officials are to lowering inflation to their target level and whether they plan to raise rates again to do so.

"The Fed holds all the keys. That's what everybody's watching," said Jonathan Waite, fund co-manager and senior research analyst at Frost Investment Advisors.

Traders are also preparing for results from Nvidia Wednesday, which has soared this year on investors' excitement about artificial intelligence technology. The chip maker's shares have more than tripled this year, making the company the top performer in the S&P 500.

If Nvidia's results or comments from company executives were to throw cold water on the investing case for artificial intelligence, it could threaten the rally in tech stocks that has helped power the market this year. The Nasdaq Composite has advanced 29% compared with a gain of 14% by the S&P 500.

The climb in the benchmark US government bond yield paused Tuesday. The yield on the 10 Year US Treasury note fell to 4.327%, from 4.339% on Monday. That had been its highest settle since 2007.