Chipmakers Lead Cautious Rebound
Equity markets worldwide advanced on Wednesday, with technology and sovereign debt finding firmer footing as traders avoided big bets before US inflation figures arrived later in the session. European tech names led sector gains, drawing support from an overnight rebound in Asia, where Samsung Electronics and SK Hynix finished higher, and from positive guidance issued by Dutch chip equipment maker ASML, whose stock climbed 3%. The STOXX 600 added 0.4%, while the MSCI All-World index was marginally higher, up 0.1%.[S1][S2][S3][S4]
Caution nonetheless lingered, since crude prices climbed after two ships were attacked in the Strait of Hormuz and Iranian officials told Reuters they were adopting fresh methods to strike vessels, heightening the danger of further interruptions to energy flows. Brent crude futures, trading near their highest level in roughly two weeks, were up almost 1% on the day at $106.5 per barrel.[S1]
Bonds Find Respite as Yields Dip
Sovereign debt also found some relief following several weeks of relentless selling, driven by elevated energy costs and growing anticipation that global borrowing costs would continue drifting higher. The benchmark 10-year Treasury yield slipped 2 basis points to 5.2%, close to a two-week low, while the 30-year yield also shed 2 bps to 5.58%, on track for a fourth consecutive daily drop, its longest run of declines since June.[S1]
A further batch of big-bank results, this time from Bank of America and Morgan Stanley, was due later on Wednesday. Shares of US lenders retreated after Citigroup and several peers posted mixed quarterly figures, dragging on the wider market. Futures tied to the S&P 500 and the Nasdaq each gained 0.2%.[S1]
CPI Test Awaited
Market participants were waiting for Wednesday's publication of the US consumer price index for September, which is forecast to have accelerated amid firm energy and other commodity prices last month. Economists projected headline inflation quickened to an annual 3.6% in September as energy costs rebounded, with core CPI up 0.2% month on month. Money markets currently price roughly a 20% probability of a Federal Reserve increase late this month and an almost certain move in December. Wednesday's inflation reading could sharpen those expectations.[S1][S5]
New York Fed President John Williams said the central bank might need one more rate increase this year to cool inflation, though he saw no reason for further hikes in 2027. Eugene Leow, senior rates strategist at DBS, wrote in a note that with several FOMC members signalling a likely pause this month amid slower job creation, inflation data probably would not be hot enough to shift rate-hike odds meaningfully. The dollar index was unchanged at 102.17, near its highest since April 2025. The euro firmed slightly to $1.1203, as did the pound at $1.326.[S1]
In China, meanwhile, Wednesday's figures showed producer prices climbing at their quickest pace in over four years, while consumer inflation ticked higher last month, even though soft domestic demand kept broader price pressures in check.[S1][S4]
