Australia

Australian shares are set to fall at the open, as Investors grappled with a sharp increase in borrowing costs and the possibility of worsening violence in the Middle East.

ASX futures were down 0.9% or 65 points as of 8:00am on Monday, suggesting a lower open.

Stocks fell Friday, capping a week of losses for US markets.

The S&P 500 fell 1.3%. The tech-heavy Nasdaq Composite dropped 1.5%. The blue chip Dow Jones Industrial Average declined 287 points, or 0.9%.

All three major indexes finished the week in the red.

In commodity markets, Brent crude oil fell 0.2% to US$92.16 a barrel while gold was up at US$1,981.40.

In local bond markets, the yield on Australian 2 Year government bonds was lower at 4.27% while the 10 Year yield was also down at 4.74%. US Treasury notes were lower, with the 2 Year yield at 5.07% and the 10 Year yield at 4.91%.

The Australian dollar was unchanged at 63.13 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was flat at 100.43.

Asia

Chinese shares closed lower, with the benchmark Shanghai Composite Index declining 0.7% to 2983.06, below the key 3000 support level. Despite property woes, there are some positive signs for Chinese equities from a macro perspective, as activity data has improved, particularly in August and September, Elke Speidel-Walz, chief economist for emerging markets at DWS, says in a note. Telecommunications and software stocks led the losses. China Mobile lost 2.0% and China Telecom declined 3.85%. Beijing Kingsoft Office Software was 3.85% lower and iFlytek shed 5.1% after a 3Q earnings miss. CATL fell 0.9% after reporting slower 3Q net profit growth. The Shenzhen Composite Index ended 1.0% lower and the tech-heavy ChiNext Price Index lost 0.9%.

Hong Kong shares closed lower, notching a third straight session of declines amid a broad regional downturn. Factors including geopolitical tensions in the Middle East, rising US Treasury yields and concerns over China's property sector have fueled volatility across global equities, Saxo's APAC strategy team says in a note. The benchmark Hang Seng Index fell 0.7% to 17172.13 and the Hang Seng Tech Index slid 1.0%. Energy and tech names led the losses. Xinyi Solar and ENN Energy fell 3.1% and 4.8%, respectively, while tech and AI company Baidu shed 3.2% after target-price cuts by brokerages. Property stocks rose in a possible correction despite lingering concerns about the sector, reversing the past week's losses. Country Garden gained 2.5% and New World Development advanced 2.0%.

Japanese stocks ended lower, dragged by falls in electronics and retail stocks, as concerns persisted over the higher costs of energy and borrowing amid the Middle East conflict. Panasonic Holdings dropped 2.5% and Seven & i Holdings shed 2.5%. Meanwhile, Daiichi Sankyo soared 14% following a multibillion dollar deal with Merck to jointly develop and commercialise three cancer drug candidates. The Nikkei Stock Average fell 0.5% to 31259.36. USD/JPY is at 149.86 vs 149.79 as of Thursday 5 p.m. Eastern Time. Investors are focusing on the latest developments in the war between Hamas and Israel ahead of the earnings season set to start next week. The 10-year Japanese government bond yield stayed flat at 0.840%.

Indian shares closed lower, following regional equity markets, as tech and steel stocks weighed. A sharp rise in US bond yields due to the Fed's more hawkish policy outlook on better-than-expected economic data may lead to risks for foreign fund flows into emerging markets like India, HSBC Global Research analysts say in a note. The benchmark Sensex fell 0.35% to 65397.62. ITC and Tata Steel led the losses, falling 2.7% and 2.2%, respectively. JSW Steel shed 1.4%. Bank stocks were among the gainers, with Kotak Mahindra Bank rising 1.8% and IndusInd Bank adding 1.4%.

Europe

European stocks are a sea of red as investors fret about a possible escalation of Middle East hostilities and interest-rate hikes. The Stoxx Europe 600, FTSE 100, CAC 40, DAX and other European markets fell more than 1%. Brent crude gained 1% to $93.34 and gold and silver prices rally 1.3% and 3.3% respectively. Still, oil and mining stocks dropped as economic concerns and worries that the Israel-Hamas conflict could spread elsewhere hit investors' appetite for equities. "A hawkish Fed, surging US yields and the fear of an escalation in the Middle East have pushed global stock indices into negative territory for the week," IG analyst Axel Rudolph writes.

The FTSE 100 fell 0.4% to 7470.93 points as investors sold risky assets in favour of safer investments such as gold amid rising geopolitical uncertainty. "A weak session overnight in Asia has dragged Anglo American to the bottom of the FTSE 100 while safe-haven gold miner, Endeavour Mining is at the top of the basket as investors flock to safety assets," Interactive Investor head of investment Victoria Scholar said in a note. Anglo-American fell 2.5% while hospitality company Intercontinental Hotels Group was down 2.4% after reporting slow growth in 3Q revenue. Retailers fell following weak U.K. retail sales data. Gold miner Endeavour mining climbed 2.2%.

North America

Stocks fell Friday, capping a week of losses for US markets.

The S&P 500 fell 1.3%. The tech-heavy Nasdaq Composite dropped 1.5%. The blue chip Dow Jones Industrial Average declined 287 points, or 0.9%.

All three major indexes finished the week in the red. Investors grappled with a sharp increase in borrowing costs and the possibility of worsening violence in the Middle East.

Bond prices rose and yields declined. The 10-Year US Treasury yield settled at 4.924%, down from 4.987% Thursday.

The 10-year Treasury yield has risen more than a full percentage point since the Federal Reserve last raised rates at the end of July, an unusually large jump in such a short time frame. The S&P 500 has gained 10% this year, but is down 7.5% since July 26.

Some investors are wondering whether the bond selloff could soon reverse if economic data starts to soften or geopolitical tensions worsen. Jerome Powell, chair of the central bank, suggested Thursday that those higher yields could lead the Fed to pause its campaign of interest rate increases.

"The 10-year looks relatively attractive on a longer-term basis at the 5% range," said John Goltermann, chief investment officer at Townsend & Associates. He cited cooling job openings data as a sign that higher rates may already be slowing the economy, which could lead to a bond rally.

The question here "is how much more do we have to go, and how sensitive would yields be to a contrarian print," said Jake Remley, senior portfolio manager at Income Research & Management.

Traders in interest-rate derivatives are pricing in a 96.2% chance that the Fed leaves its policy rate unchanged at its November meeting, according to CME Group's FedWatch tool.

Financial stocks sputtered as more institutions reported third quarter results. Regions Financial declined 12% after earnings while American Express dropped 5.4%. The KBW Nasdaq Bank Index fell 3.1%. JPMorgan Chase stock fell 1.6%, declining for a fifth consecutive session.

So far this earnings season, 86 companies within the S&P 500, or 17% have reported earnings, according to FactSet. Within that group, earnings have grown 4.9% from a year ago, and 73% have topped Wall Street forecasts, raising hopes that profits will grow this quarter for the first time in a year.

"I think the expectation of a strong earnings season is already priced into the market, and there's downside risk if companies disappoint," said Dana D'Auria, co-chief investment officer at Envestnet.

Brent crude oil futures dropped 0.2% to settle at $92.16 per barrel, snapping a three-session win streak for the international benchmark. The S&P 500 energy sector fell 1.7%.

Shares of solar product manufacturer SolarEdge Technologies fell 27%, the worst performer in the S&P 500, after the company said installations of its equipment were slowing. Rival Enphase Energy dropped 15%.