European stocks are poised to open significantly lower on Wednesday, with investors expressing concerns over the U.S. economic outlook. Market participants await further economic data expected this week, which could provide insights into the Federal Reserve's rate-cutting cycle.
Technology stocks may experience heightened selling pressure following reports that the U.S. Justice Department has issued a subpoena to Nvidia as part of an intensifying investigation into the company's antitrust practices.
In the realm of economic data, the U.S. is set to release figures on trade, job openings, factory orders, and the Federal Reserve's Beige Book survey later today. This will be followed by reports on weekly jobless claims, services sector activity, and the ADP employment change on Thursday.
The primary focus this week will be the August jobs report, scheduled for release on Friday. Economists forecast an increase of 165,000 jobs in August, following a rise of 114,000 in July. The unemployment rate is anticipated to decrease slightly to 4.2 percent, down from 4.3 percent in July, which was the highest level since October 2021.
Closer to home, final composite Purchasing Managers' Index (PMI) results from the euro area and the U.K. are expected later today, marking a busy day for European economic news.
Asian markets mirrored Wall Street's decline, with benchmark indexes in Australia, South Korea, and Japan dropping between 2 to 4 percent. The Japanese yen, a safe-haven asset, surged, while bond yields fell and gold prices remained steady amid concerns over U.S. economic growth. Meanwhile, oil prices extended their losses after dropping nearly 5 percent in the previous session.
In the U.S., stocks slumped overnight, with major indices recording their worst declines since August 5. Weak manufacturing data exacerbated concerns about a potential recession in the U.S. economy. The tech-heavy Nasdaq Composite plummeted 3.3 percent due to significant declines in Nvidia and other chip stocks. The S&P 500 fell 2.1 percent, and the Dow dropped 1.5 percent, as two manufacturing activity indicators reflected continued sluggishness in the sector.
European stocks also retreated from record highs on Tuesday, as new U.S. data reignited growth concerns. The pan-European STOXX 600 fell by 1 percent. Germany's DAX decreased by 1 percent, France's CAC 40 shed 0.9 percent, and the U.K.'s FTSE 100 declined by 0.8 percent.
