Australia

Australian shares are set to open lower, while U.S. stocks fell after a sell-off in tech stocks.

ASX futures were down 0.94% or 75 points as of 8:00am on Thursday, suggesting a lower open.

U.S. stocks fell, led by tech, with the Nasdaq declining more than 3%. Treasurys settled mixed, with investors flocking to the two-year note on risk-off sentiment following disappointing tech-related earnings and weak European data.

The thrashing left the S&P 500 2.3% lower, its worst day since December 2022, while the Dow Jones Industrial Average lost 1.2%, or 504 points. The tech-heavy Nasdaq's 3.6% decline was its largest skid since October 2022.

In commodity markets, Brent crude oil was up 0.9% to US$81.71 a barrel, while gold was down 0.2% at US$2,393.39.

The Australian dollar was at 65.79 US cents, down from its previous close of 65.80.

Asia

Chinese shares ended lower amid muted investor sentiment. The benchmark Shanghai Composite Index fell 0.5% to 2,901.95, the Shenzhen Composite Index dropped 1.3% and the ChiNext Price Index declined 1.2%. Almost all sectors closed lower, with property and auto stocks leading losses. Analysts have limited expectations for property stimulus measures to come out of the upcoming Politburo meeting at end-July. Poly Developments & Holdings Group dropped 3.1% and China Vanke was 2.9% lower. BYD shed 1.3% and Great Wall Motor declined 5.9%. Telecom stocks gained, with China Mobile up 0.9% and China Telecom 1.3% higher.

Hong Kong shares ended lower, weighed by technology stocks. The Hang Seng Index fell 0.9% to 17,311.05, and the Hang Seng Tech Index shed 1.5%. Investors awaited key U.S. economic data due later this week, including the PMI and 2Q GDP prints. Among major stocks, Meituan dropped 4.1% and Xiaomi was 2.5% lower. Chow Tai Fook Jewellery declined 6.6% after it reported a weak 1Q sales performance, and semiconductor and electronics equipment maker ASMPT slumped 23% after a disappointing 2Q and quarterly guidance. Gainers included China Resources Power, which added 4.2%, and Cnooc, which was 1.2% higher.

Japanese stocks ended lower, dragged by falls in auto and real-estate stocks, as caution persists over the Bank of Japan's potential rate increases and as the yen rebounds. Mitsubishi Motors skidded 7.4% after its 1Q net profit dropped on weaker North American business. Isuzu Motors lost 5.4% and Sumitomo Realty & Development dropped 3.9%. The Nikkei Stock Average fell 1.1% to 39,154.85. Investors are focusing on economic data and corporate earnings. The 10-year Japanese government bond yield rose one basis point to 1.070%.

Indian shares closed lower, dragged by finance and bank stocks. Investors are still digesting the budget plan, but the proposed higher taxes on capital gains further weighed on market sentiment, analysts say. Bajaj Finserv led losses, falling 2.4%, and Axis Bank shed 1.8%. State Bank of India lost 1.35%. Meanwhile, Tech Mahindra led gains with a 2.7% rise, and Tata Motors added 2.6%. The benchmark Sensex declined 0.35% to 80,148.88.

Europe

Stocks in the U.K. slipped Wednesday, as the FTSE 100 Index dropped 0.2% to 8153.69.

Among large companies, Ocado Group PLC posted the largest decline, falling 4.6%, followed by shares of Breedon Group PLC, which fell 3.8%. Shares of CMC Markets PLC fell 3.7%.

Ascential PLC was the biggest gainer during the session, surging 26%, and Zegona Communications PLC surged 17%. Oxford Nanopore Technologies PLC rounded out the top three movers on Wednesday, as shares surged 10%.

In other parts of Europe markets closed lower, with the STOXX Europe 600 Index down 0.6% to 512.30, Germany's DAX fell 0.9% to 18,387.46 and France's CAC 40 lost 1.1% to 7,513.73.

North America

A stock-market selloff intensified Wednesday, wiping out hundreds of billions of dollars in value from the Magnificent Seven group of tech giants and pushing the Nasdaq Composite to its first decline of 3% or more in 400 trading days.

After a frenzy over artificial intelligence sent stocks to new heights in the first half of the year, investors have suddenly grown more skeptical of its potential payoffs. Traders trained those newfound doubts Wednesday on Tesla, where a delayed robotaxi rollout helped shares slide 12% in a move that reverberated across the technology sector.

The thrashing left the S&P 500 2.3% lower, its worst day since December 2022, while the Dow Jones Industrial Average lost 1.2%, or 504 points. The tech-heavy Nasdaq's 3.6% decline was its largest skid since October 2022, when Federal Reserve officials were cranking up interest rates to tamp down inflation.

Stocks had climbed to records since then on the back of AI optimism. Then a cool inflation report this month convinced many traders that rate cuts are around the corner, sparking a shift of money to other sectors in what could be a stock-market rotation of historic proportions.

Disappointing earnings reports by Tesla and Alphabet provided the spark for Wednesday's fireworks, which pushed each member of the Magnificent Seven into the red. The stocks collectively lost $768 billion in market value, according to Dow Jones Market Data, the biggest such wipeout on record since Meta Platforms went public as Facebook in 2012.

The market's reaction Wednesday to the Google owner's earnings, which slightly outpaced estimates but sparked AI-spending concerns, showcased the sky-high bar for the group as investors await results from Nvidia, Microsoft and others.

"You can't just meet estimates. You have to beat estimates," said David Lundgren, portfolio manager at Little Harbor Advisors. Referring to the unofficial projections shared on Wall Street, he added, "You have to beat the whisper number, frankly."

The vibe shift on Wednesday rippled through stocks linked to the emerging AI supply chain for semiconductors and other products. Super Micro Computer dropped by 9.1%, while Broadcom fell 7.6%. Qualcomm and Advanced Micro Devices each fell by more than 6%.

The ascendance of such technology firms over the past 18 months has shielded broader indexes from other industries that have underperformed. On Wednesday, that dynamic flipped to some extent, with the S&P 500's utilities, consumer-staples, health-care and energy sectors all finishing in the green.

Defense contractor Lockheed Martin rose 2.8%, extending its postearnings bump and notching an all-time high. AT&T logged its biggest gain of the year. Visa slipped by 4% after the credit-card company reported quarterly revenue growth that came in below analysts' estimates.

As tech stocks have been battered in recent weeks, investors have increasingly shifted money toward small and midsize firms. The Russell 2000 index declined 2.1% Wednesday, but its 10.9% outperformance of the S&P 500 over the past 11 trading sessions is the largest such margin in more than 24 years, according to Dow Jones Market Data.

"Equity market leadership has experienced a dramatic shift in recent weeks," John Lynch, chief investment officer of Comerica Wealth Management, wrote in a recent note.

Many analysts believe smaller firms, which tend to be more exposed to higher rates in the form of floating-rate debt, could be among the beneficiaries of rate cuts. Yields on 10-year Treasurys, a rough proxy for investors' rate expectations, held roughly steady Wednesday at 4.285%.

In commodity markets, oil prices ticked upward by 0.8%, closing at $77.59 a barrel, after trading Tuesday at their lowest level since early June. Copper futures, which jumped in price earlier this year due to projections of an AI-driven data-center boom, retreated for an eighth consecutive day.

Investors evaluating whether the stock-market rotation has legs will parse earnings Thursday, from companies including Northrop Grumman, Honeywell International and Norfolk Southern. Colgate-Palmolive, Bristol Myers Squibb and 3M are among those due Friday.

For now, many traders expect more turbulence ahead. The CBOE Market Volatility Index, known as Wall Street's fear gauge, rose Wednesday at its steepest rate since 2022.

José Torres, senior economist at Interactive Brokers, told clients that factors are lining up for a potentially violent correction to stocks to continue. "Risk-off sentiments are indeed dominating Wall Street," he said.