European Shares Seen Lower As Investors Weigh Rising Inflation Risks

(RTTNews) - European stocks may drift lower at open on Wednesday as investors weigh inflation risks and fret over the huge valuations of big AI players. Oil prices remain elevated and global bond yields are on the rise as escalating tensions around Iran raised the risk of a prolonged conflict in the Persian Gulf. U.S. stock futures ticked lower on growing concerns that surging oil prices could keep inflationary pressures persistent and leave interest rates higher for longer.

Asian markets were broadly lower, with South Korea and Japan leading losses as a rout in semiconductor stocks deepened. The U.S. dollar held near multi-month lows against major peers despite Treasury yields easing from recent highs ahead of the Federal Reserve's July meeting minutes release later in the day. Closer home, ECB President Christine Lagarde's speech as well as the U.K. and Eurozone CPI reports for July will be in the spotlight later today. ECB chief economist Philip Lane said Tuesday that the region's inflation rate of 3 percent remains "too high" from the standpoint of policy rate adjustment. Gold rose half a percent to $4,356 an ounce after tumbling nearly 2 percent in the previous session to snap a two-day rise amid a sell-off in bond markets. Brent crude futures rose toward $92 a barrel, extending gains for a fourth consecutive session after the American Petroleum Institute estimated that U.S. crude oil inventories fell by 328000 barrels in the week ending August 14, marking their first decline in five weeks. A bulk carrier was struck by an unknown projectile whole transiting the Strait of Hormuz, raising the prospect of ongoing disruptions to supply. In Lebanon, an Israeli strike on a health center has killed 12 medical workers in the southern part of the city. The United Arab Emirates suspended all trade and commercial ties with Iran until further notice after accusing Iran of firing two ballistic missiles towards the Gulf State. Overnight, U.S. stocks fell for a third consecutive session as elevated oil prices and rising global bond yields fueled inflation concerns. The 30-year bond yield reached its highest levels in nearly two decades and the benchmark 10-year yield finished around 4.708 percent after President Donald Trump said there are currently no U.S.-Iran talks taking place or scheduled and that the U.S. naval blockade remains in force. Trump also insisted the Strait of Hormuz was open and operating and that mines had been removed or detonated. On the contrary, Iran maintained that the strategic waterway will not be opened until the United States meets its demands, highlighting the deep disconnect between the countries. The tech-heavy Nasdaq Composite tumbled 1.3 percent following a sharp decline in semiconductor and data-storage stocks. The S&P 500 shed 0.7 percent and the narrower Dow dipped 0.2 percent after the release of disappointing readings on housing starts and industrial output. European stocks closed mostly lower on Tuesday as Germany's 10-year bond yield reached its highest level since 2011 amid concerns over deteriorating geopolitical conditions in the Persian Gulf. The pan-European STOXX 600 declined 0.7 percent to reach its lowest level in more than two weeks. The German DAX and France's CAC 40 both fell by 0.8 percent while the U.K.'s FTSE 100 inched up 0.1 percent as energy stocks gained alongside oil prices.

(RTTNews) - European stocks may drift lower at open on Wednesday as investors weigh inflation risks and fret over the huge valuations of big AI players.

Oil prices remain elevated and global bond yields are on the rise as escalating tensions around Iran raised the risk of a prolonged conflict in the Persian Gulf.

U.S. stock futures ticked lower on growing concerns that surging oil prices could keep inflationary pressures persistent and leave interest rates higher for longer.

Asian markets were broadly lower, with South Korea and Japan leading losses as a rout in semiconductor stocks deepened.

The U.S. dollar held near multi-month lows against major peers despite Treasury yields easing from recent highs ahead of the Federal Reserve's July meeting minutes release later in the day.

Closer home, ECB President Christine Lagarde's speech as well as the U.K. and Eurozone CPI reports for July will be in the spotlight later today.