Global equity markets traded steadily on Wednesday, with Brent crude lacking clear direction following its longest losing streak this year, as traders kept a close watch on whether tensions between the US and Iran might ease further. The US dollar climbed to its highest level since July. As of the latest update, Dow Jones futures were down 0.16%, S&P 500 futures slipped 0.05%, and Nasdaq futures dropped 0.24%.
The MSCI global equity index held steady after four consecutive sessions of gains, while major European and Asian benchmarks also showed no definitive trend. In pre-market trading, IonQ shares surged 14% after the company announced it had developed what it describes as the tech industry's first end-to-end real-time quantum error correction technology. Meanwhile, a gauge of chipmakers appeared poised to snap a six-session winning streak.
Japanese markets were closed for a holiday, but Nikkei 225 futures were quoted at 66,775 points, roughly 1,760 points above Friday's spot market closing level. Chris Weston, head of research at Pepperstone, noted that with crude oil pulling back further, interest rates and the US Treasury market staying calm, and both Nasdaq cash and futures hitting record highs, Japanese equities could open notably stronger on Thursday when trading resumes. He added that memory chip stocks have taken over the leadership baton, with the semiconductor complex advancing for a sixth straight session.
SoftBank's bond offering, exceeding $10 billion, also drew attention. Reports indicate the deal has attracted more than $20 billion in subscription interest, potentially making it one of the largest junk bond transactions on record.
Another Warning from Trump
Brent crude oscillated between gains and losses after falling for five consecutive sessions, trading near $99 per barrel. Sources said Saudi Arabia has restarted its East-West pipeline and may resume crude exports through the Red Sea port of Yanbu. US President Donald Trump stated that negotiations between the US and Iran in New York have made progress, but also warned that if a deal cannot be reached, he would "destroy" Iran.
Brock Weimer, investment strategy analyst at Edward Jones, suggested the situation may be approaching a phase where both sides have incentives to de-escalate. Iranian President Masoud Pezeshkian is scheduled to address the UN General Assembly later Wednesday, with markets watching for any possibility of a meeting with Trump. If oil shipments through the Strait of Hormuz continue to recover, it could help ease inflationary pressures and influence global interest rate outlooks. Still, caution persists, as similar optimism has faded quickly on multiple occasions in the past.
Dollar Extends Gains for Fourth Day
Falling oil prices pushed US Treasury futures modestly higher, keeping the 10-year yield below 5.0%. The dollar rose for a fourth consecutive session. Despite easing energy prices, Federal Reserve officials continued to emphasize the need for vigilance on inflation following last week's US rate hike. Fed Governor Michael Barr and Chicago Fed President Austan Goolsbee are scheduled to speak later Wednesday.
Expectations of higher interest rates lifted the dollar to multi-week highs against the euro, pound, and Canadian dollar. The euro held near $1.1414, close to a two-month low, while the dollar advanced to 157.76 against the yen. Markets remain cautious about the dollar-yen breaking above 160, as that could raise the risk of renewed intervention by Japanese authorities.
Emma Moriarty of CG Asset Management said that equity market risk sentiment, along with interest rate and inflation prospects, are currently highly dependent on oil price movements. Although Brent has retreated, overall levels remain elevated.
Economic Data in Focus
S&P Global will release flash September purchasing managers' index readings for manufacturing and services on Wednesday. US data is expected to show the economy continuing to grow at a steady pace. In the eurozone, private sector activity expanded at the fastest pace in over three years, with the composite PMI rising to 53.1 from 52 in August, well above the 50 threshold separating growth from contraction.
Traders are also watching a major summit later this week for fresh signals on trade and other economic topics. Expectations for substantial progress on long-standing disputes remain limited.
OECD: AI Boom May Offset Energy Shock for Now
The Organization for Economic Cooperation and Development (OECD), in its interim economic outlook, projected global growth to slow to 2.9% in 2026, slightly better than the 2.8% forecast in June. Looking to 2027, commodity price shocks stemming from Middle East conflicts are expected to weigh on growth momentum, with the OECD predicting global growth of just 3.0%, below June's 3.1% projection.
The OECD noted that robust AI infrastructure spending this year, from data centers to semiconductors, has become a key pillar of economic resilience, supporting US growth and boosting technology exports from Japan and South Korea. However, the OECD warned that the global outlook is particularly exposed to energy market volatility, extreme weather from a strong El Nino, surging government bond yields, and disappointing returns on AI investment. If these risks materialize, they could shave 0.7 percentage points off global growth and add 1.1 percentage points to global inflation next year.
Stocks to Watch
Industrial manufacturer Worthington jumped about 16% after management issued an upbeat earnings outlook. CEO Joseph Hayek said the company sees growth opportunities across all its businesses, "including rapidly increasing demand for custom tanks built to ASME standards used in data center liquid cooling systems." According to LSEG data, the company's first-quarter adjusted earnings and revenue both beat Wall Street analyst expectations.
Homebuilder KB Home fell more than 1% after its fourth-quarter delivery forecast missed expectations. The company projects home gross margins between 16% and 16.6% for the quarter, below the 17.2% consensus estimate from analysts surveyed by LSEG.
Quantum computing firm IonQ surged 12% after announcing successful testing of what it calls the industry's first real-time quantum error correction decoder. The company said this new technology enables quantum error correction throughout the quantum computing process without slowing computational speed. IonQ's breakthrough lifted the entire quantum computing sector in Wednesday pre-market trading, with RGTI and QBTS each gaining more than 5.5%, and INFQ posting similar gains.
A activist hedge fund Jana Partners urged theme park operator Six Flags Entertainment to evaluate a potential sale, sending shares up 1%. Citing sources familiar with the matter, the hedge fund's move stems from disappointment with Six Flags' second-quarter earnings performance.
Instacart parent Maplebear announced its grocery e-commerce platform will integrate with Meta's personal AI agent Muse, with shares rising over 3%. This marks another AI collaboration for Instacart, following integrations with OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini.
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