Australia

Australian shares are set to open higher, after U.S. stocks ended slightly lower as investors weighed a blast of corporate earnings reports.

ASX futures were up 0.13% or 11 points as of 8:00am on Wednesday, suggesting a higher open.

U.S. stocks edged lower as traders sift through 2Q earnings reports and digested the latest political developments out of Washington D.C..

The DJIA fell 57 points, or 0.1%, to 40,358, the S&P 500 lost 0.2% to 5,555 and the Nasdaq edged 0.1% lower to 17,997.

In commodity markets, Brent crude oil was down 1.0% to US$81.55 a barrel, while gold was flat at US$2,408.84.

The Australian dollar was at 66.15 US cents, up from its previous close of 66.14.

Asia

Chinese shares ended lower, weighed by liquor and semiconductor stocks. Investors hope for more upcoming support measures from Beijing after the Third Plenum fell short on details to boost the ailing economy. Liquor and consumer-related stocks fell amid China's fragile consumer sentiment. Kweichow Moutai dropped 2.9% and Wuliangye Yibin fell 3.4%. Semiconductor Manufacturing International Corp. dropped 3.3% and Hygon Information was 5.05% lower. The benchmark Shanghai Composite Index ended 1.65% lower at 2,915.37, the Shenzhen Composite Index dropped 2.6% and the ChiNext Price Index lost 3.0%.

Hong Kong shares ended lower, with the Hang Seng Index down 0.9% at 17,469.36 and the Hang Seng Tech Index dropping 1.8%. Investors are awaiting key U.S. economic data due later this week, including PMI and 2Q GDP data. Among major stocks, consumer and technology stocks led declines. Nongfu Spring shed 3.8%, Anta Sports Products declined 2.8% and Meituan dropped 2.6%. Gainers included Bank of China, which added 1.2%, and China Unicom, up 2.05%.

The Nikkei Stock Average ended flat at 39,594.39 as gains in shipping and financial stocks helped offset losses in electronics stocks. Nippon Yusen soared 8.2% after it raised its fiscal-year earnings forecasts on stronger container-shipping business. Mizuho Financial Group gained 2.1% and Dai-ichi Life Holdings climbed 1.6%, while Olympus dropped 2.5% and Keyence lost 2.0%. Broader market index Topix gained 0.2% to 2,833.39. The 10-year Japanese government bond yield rose 1 basis point to 1.060%. Investors are focusing on economic data and their policy implications.

Indian shares closed lower after the country's government outlined its budget, which included plans to raise capital gains taxes. The benchmark Sensex dropped sharply as the finance minister delivered the budget plans, but then pared losses to close 0.1% lower at 80,429.04. "At a time when the equity indices are at an all-time high, the government has tried to take a share out of the growth and the profits earned by the investors from the capital market," said Nilesh Sharma, president & executive director of SAMCO Securities. Larsen & Toubro led losses, down 3.1%. Bajaj Finance fell 2.2% despite reporting that 2Q net profit rose on year. Titan Co. led gains, up 6.6%.

Europe

Stocks in the U.K. slipped Tuesday, as the FTSE 100 Index declined 0.4% to 8,167.37.

Among large companies, Dowlais Group PLC posted the largest decline, falling 3.9%, followed by shares of SSP Group PLC, which fell 3.4%. Shares of Jet2 PLC fell 3.3%.

Zegona Communications PLC was the biggest gainer during the session, surging 5.4%, and Compass Group PLC surged 4.5%. Indivior PLC rounded out the top three movers on Tuesday, as shares gained 4.2%.

In other parts of Europe markets closed mixed, with the STOXX Europe 600 Index up 0.1% to 515.47, Germany's DAX rose 0.8% to 18,557.70 and France's CAC 40 lost 0.3% to 7,598.63.

North America

Relatively placid stock indexes on Tuesday masked furious paddling beneath the surface of the market.

The tech-heavy Nasdaq Composite inched 0.1% lower, while the S&P 500 edged downward by 0.2%. The Dow Jones Industrial Average dropped by 0.1%, or 57 points.

Investors have been fixated in recent days on a U.S. presidential election in flux, a market rotation of potentially massive proportions and a technology outage that snarled global travel with the blue screen of death. But Tuesday trained traders' focus back to basics with a slew of corporate earnings reports.

Shares in United Parcel Service skidded 12% -- the worst performance in the S&P 500 -- following a report of weaker-than-expected revenue and a pared-back outlook. Spotify surged 12% after the audiostreaming company posted its second-consecutive quarterly profit. Down 6.4%, General Motors stock scored its worst daily performance since 2022, with investors concentrating on eroding market share in China rather than strong domestic demand.

The topsy-turvy session extended a period of unusual volatility among individual stocks fueled by investor bets on winners and losers from the artificial-intelligence boom and expected interest-rate cuts. On Tuesday, 10-year Treasury yields held largely steady at 4.240%.

In commodity markets, lackluster fuel demand pushed U.S. oil prices to their lowest level since June 7, with benchmark crude declining 1.8%, to $76.96 a barrel. Copper futures, which surged in price earlier this year due to projections of an AI-driven data center boom, retreated for their seventh day in a row. The metal's losing streak is its longest since February 2020.

Major stock indexes on Tuesday seesawed between minor gains and losses as investors parsed the first major blast of corporate earnings reports.

Lockheed Martin's 5.6% gain was its best day of the year after the defense contractor lifted its profit outlook amid conflicts in Ukraine and the Middle East. With strong demand for its commercial engines and services, GE Aerospace shares jumped 5.7%. The truck maker Paccar slumped 11% following earnings that lagged behind Wall Street estimates.

But investors were particularly eager for Tesla and Alphabet earnings after the closing bell for hints as to whether a marketwide rotation away from big tech and into smaller firms would continue.

"We are definitely past the euphoria stage of this [AI] trend," said John Belton, a portfolio manager at Gabelli Funds. "It's now time to see some real tangible results."

Analysts at Goldman Sachs and elsewhere have increasingly questioned the payoff of AI, adding momentum to a selloff across the so-called Magnificent Seven last week. At the same time, many investors have shifted money into small- and medium-size companies that have been battered by higher interest rates and could stand to benefit from cuts.

Belton said he takes comfort in the fact that big tech's outsize share-price performance this year has largely been vindicated by earnings that have exceeded Wall Street's expectations. "It's not to say the rotation can't continue," he added.

On Tuesday, the Russell 2000 index of small and midsize companies once again outperformed its major counterparts with a 1% gain.

"It's been such a long, long period of underperformance for small-caps," said Samuel Dedio, chief investment officer of the small-cap focused Patrumin Investors. After the Russell 2000's 9.6% gain so far this month, he added, "I'm very optimistic."