By Dow Jones Newswires Staff
Global bond yields pulled back from multiyear highs but remained elevated in early European trade, as investors await minutes from Federal Reserve's July policy meeting.
Bonds sold off dramatically Tuesday, driven by investor fears that the interminable U.S.-Iran conflict will drag on global growth at the same time that governments and corporates spend more.
The sharp rise in borrowing costs added to downward momentum in chip stocks, which dragged on blue-chip indexes across Asia. Investors look set to pause the AI-related selloff in U.S. trade, however, with chip stocks trading flat premarket as Nasdaq futures edge higher.
Oil prices rose slightly Wednesday, with Brent crude holding steady above $91 a barrel as regional tensions continue to escalate and peace talks remain stalled.
The Fed's July meeting minutes are keenly anticipated given Chair Kevin Warsh's aversion to the central bank providing forward guidance. Investors will look for signals on rate-setters' economic thinking, with bond yields likely to move in response.
--Oil prices rose for a fourth day. In early European trading, Brent crude was up 0.2% to $91.26 a barrel, while WTI futures rose 0.3% to $84.37 a barrel. "Brent crude remains above $90 a barrel as geopolitical tensions and uncertainty surrounding the Strait of Hormuz keep a significant risk premium in energy markets," analysts at IG said. President Trump said Tuesday there are no ongoing or scheduled talks with Tehran and that the U.S. naval blockade remains in full force. Meanwhile, the U.A.E. halted trade and financial transactions with Iran amid escalating regional tensions.
-- In the U.S., futures for the Dow Jones Industrial Average and the S&P 500 futures nudged up by 0.1%. Nasdaq futures added 0.15%, putting the index on pace for its first positive session in four trading days. Chip stocks stabilized premarket after sharp losses Tuesday, with Micron and Intel both trading higher. Analog Devices, Lowe's and Target are among companies reporting earnings before market open.
--Asian equities broadly fell. South Korea's Kospi sank 5.8% and Japan's Nikkei Stock Average was 3.2% lower. China's Shanghai Composite Index declined 2.4% and the tech-heavy ChiNext Price Index shed 6.3%.
--European stock indexes were mixed in muted early trade. A global technology selloff lost some momentum, while manufacturing and chemical stocks strengthened. The Stoxx 600 was flat. In Amsterdam, the AEX was flat as ASML shrugged off the fall in global chip stocks to rise 0.5%. London's FTSE 100 edged 0.1% higher, led by miners with Rio Tinto adding 1.1%. In Paris, the CAC 40 was 0.25% higher as carmaker Stellantis added 1.6%, though chip maker STMicroelectronics slipped 1.2%. Germany's DAX and the Italian FTSE MIB traded flat. Spain's IBEX 35 lost 0.25%, dragged by Cellnex Telecom, which dropped 2.8%.
--The dollar fell as investors turned cautious ahead of the release of the Fed's July meeting minutes. Markets have recently trimmed expectations for Fed interest-rate rises following weak U.S. labor market data and subdued inflation prints. The DXY dollar index fell 0.2% to 99.472.
--U.S. Treasury yields declined in Asian trade, providing some relief after Tuesday's bond selloff. "The market is hoping that the minutes, along with [Fed Chairman Kevin] Warsh's first speech at the Jackson Hole symposium next week, will provide guidance on whether the interpretation of the Fed and economic developments is correct," SEB's Karl Steiner said in a note. The 10-year Treasury yield fell 1.8 basis points to 4.686%, while the 30-year yield declined 1.5 basis points to 5.269%. The 30-year yield hit a 19-year high of 5.337% on Tuesday.
--In Europe, bond supply will come from Germany, which auctions 6 billion euros in August 2036 Bund, while Finland is set to go ahead with the syndicated launch of a new seven-year bond. The 10-year Bund yield declines 0.2 basis points to 3.253%, having hit a high of 3.272% on Tuesday. Yields on U.K. government bonds fell 2.4 basis points to 5.050% after annual headline inflation increased by 0.3 percentage points to 2.9% in July.
--Bitcoin dropped 0.4% to $64,306.
--In early trading, New York gold futures are down 0.2% at $4,410.30 a troy ounce. "The outlook remains constrained by the U.S.-Iran conflict," said Soojin Kim from MUFG. "Energy-driven inflation could reinforce expectations for tighter Fed policy, limiting gold's upside."
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
August 19, 2026 04:40 ET (08:40 GMT)
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