Wall Street stocks dip
Benchmark 10-year yields lower
Europe's STOXX down 0.3%
Gold climbs, dollar index weakens
Oil prices climb
(Updates with U.S. markets, recasts headline, adds analyst comment)
Stocks sagged worldwide on Wednesday as earnings from Tesla and European luxury brands disappointed, while oil prices edged higher after trading near-six week lows as summer demand failed to surge.
The U.S. dollar edged lower, with traders watching out for an inflation reading on Friday and a Federal Reserve meeting next week, while the yen climbed to a seven-week high ahead of a central bank meeting next week.
"I think the big story is clearly the earnings front and you've kind of seen reports all over the map, with Tesla probably the disappointing one," said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 1.1%, while Japan's Nikkei .N225 fell 1%.
On Wall Street, all three main indexes were trading lower, led by losses in consumer discretionary, communication services and technology stocks.
Tesla's TSLA.O shares slumped nearly 12% after it reported its lowest profit margin in five years amid waning demand for electric vehicles. Other so-called "Magnificent Seven" stocks including, Nvidia NVDA.O , Alphabet GOOGL.O , Amazon AMZN.O and Microsoft MSFT.O , were all down between 1.9% and 4.5%.
The Dow Jones Industrial Average .DJI fell 0.76% to 40,051.06, the S&P 500 .SPX lost 1.53% to 5,470.78 and the Nasdaq Composite .IXIC lost 2.37% to 17,570.73.
The pan-European STOXX 600 index .STOXX was down 0.54% to 512.84 points. The world's biggest luxury group LVMH LVMH.PA had reported slower sales growth as Chinese shoppers rein in their spending.
"It's the curse of high expectations, that's what the market was coming into earnings season with, especially for the tech companies that have been the darlings of the market", said James St. Aubin, chief investment officer at Sierra Mutual Funds in Santa Monica, California.
RATE CUT EXPECTATIONS Subdued stock trading globally was symptomatic of markets looking for direction, with traders digesting a range of themes including the U.S. election, expectations of rate cuts and weak corporate earnings reports.
Oil prices snapped three straight losing sessions on Wednesday thanks to falling U.S. crude inventories and growing supply risks from wildfires in Canada, but still sat near month-and-a-half lows amid lacklustre demand.
Brent LCOc1 crude futures for September rose 0.41% to $81.33 a barrel. U.S. West Texas Intermediate crude for September CLc1 increased 0.56% to $77.89 per barrel.
U.S. GDP data on Thursday and personal consumption expenditure data - the Fed's favoured measure of inflation - on Friday could help investors calibrate their expectations of when interest rates might be cut.
Markets are pricing in 62 basis points of easing this year, with a cut in September priced in at 95%, the CME FedWatch tool showed. The benchmark U.S. 10-year Treasury US10YT=RR yield was lower for a second straight session. The yield fell 1.4 basis points to 4.225%.
"The rotation is in full force. Magnificent 7 earnings growth are decelerating, while un-magnificent 493 growth are accelerating," said Thomas Hayes, chairman at Great Hill Capital in New York, in a statement. "Fed cut will add fuel to this new trend for cyclicals, small caps and dividend stocks picking up the mantle," he said.
Gold prices rose as the dollar slipped. Spot gold XAU= added 0.7% to $2,426.00 an ounce. U.S. gold futures GCc1 gained 0.68% to $2,421.00 an ounce
The Japanese yen JPY= was 1.46% firmer against the greenback at 153.35 per dollar. In cryptocurrencies, bitcoin BTC= gained 1.54% to $66,854.94. Ethereum ETH= declined 1.23% to $3,440.30.
($1 = 155.3600 yen)
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