European stock markets are expected to open predominantly lower on Wednesday, although U.K. markets might maintain a steady position as oil prices have continued their upward trend overnight. This movement is fueled by indications of constrained supply from Russia and OPEC members.
Technology stocks may experience selling pressure due to inflation concerns and dissatisfaction with Nvidia's latest technological offerings.
In Asia, stock performance was mixed. Mainland Chinese and Hong Kong markets saw significant declines, driven by worries over China's weakening economy and tariff threats from incoming U.S. President Donald Trump. Additionally, China's currency, the yuan, dropped to a 16-month low despite stronger-than-anticipated guidance from the central bank.
Conversely, Seoul's stock market led regional gains, despite Samsung Electronics not meeting profit expectations.
U.S. Treasuries remained stable after a previous downward trend across the curve. The monthly auction of 10-year U.S. government notes resulted in the highest yield seen since 2007, following positive data on the U.S. service sector and job openings.
Gold prices were pressured by rising U.S. Treasury yields and a stronger dollar. Meanwhile, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, advised caution in policy decisions due to the uneven progress in reducing inflation.
Looking ahead, economic data from the Eurozone, including the economic sentiment survey and reports on French consumer confidence, German factory orders, and retail sales, may attract significant attention.
Across the Atlantic, market activity might be influenced by reactions to the minutes from the latest Federal Reserve meeting.
In the U.S., stock markets declined overnight as concerns over inflation and interest rates resurfaced following upbeat economic reports. The tech-heavy Nasdaq Composite dropped 1.9%, the S&P 500 fell 1.1%, and the Dow Jones Industrial Average declined 0.4%, as the yield on the benchmark ten-year note reached an eight-month high.
Growth in the U.S. service sector accelerated in December, with the index for input prices nearing a two-year peak, and job vacancies unexpectedly rose in November. This prompted traders to adjust expectations about when the Federal Reserve might reduce interest rates this year.
In Europe, stock markets mostly closed higher on Tuesday, despite inflation in the Eurozone reaching its highest level in five months for December. The pan-European STOXX 600 rose by 0.3%, the German DAX and France's CAC 40 both increased by 0.6%, while the U.K.'s FTSE 100 ended slightly lower.
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