Global share markets came under pressure on Wednesday after a tech-led selloff on Wall Street, while the dollar gained some ground ahead of a key meeting of central bankers later in the week.
Stock futures pointed to a lower opening in Europe and most Asian bourses were in the red, with tech-heavy indexes in Taiwan and South Korea among the biggest losers, in part due to worries about the Trump administration’s growing influence on companies in the sector.
US commerce secretary Howard Lutnick is looking into the government taking equity stakes in Intel as well as other chip companies in exchange for grants under the Chips Act that was meant to spur factory-building around the country, sources said.
The move comes on the back of other unusual deals Washington has recently struck with US companies, including allowing AI chip giant Nvidia to sell its H20 chips to China in exchange for the US government receiving 15% of the revenue from those sales.
“These developments signal that the US government is heading in a concerning and more interventionist direction,” said Tony Sycamore, a market analyst at IG.
MSCI’s broadest index of Asia-Pacific shares outside Japan slid more than 1%, while Eurostoxx 50 futures lost 0.64% and DAX futures shed 0.63%. S&P 500 futures dipped 0.27% and Nasdaq futures lost 0.44%, extending a fall from the cash session overnight. Japan’s Nikkei lost 1.7% and Hong Kong’s Hang Seng Tech Index shed 1.3%.
In commodities, oil prices trimmed losses from the previous session, as investors awaited the next steps in talks to end Russia’s war on Ukraine, with uncertainty over whether oil sanctions might be eased or tightened.
Risk
While a meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskiy and a group of European allies over the Russia-Ukraine war concluded without much fanfare, Trump said the US would help guarantee Ukraine’s security in any deal to end Russia’s war there. He later said on Tuesday that the US might provide air support to Ukraine, while ruling out putting US troops on the ground.
“The US is not categorically underwriting anything, any security for Ukraine, even if they’re open to provide some, because we don’t know the conditions under which they will. So there’s quite a bit of risk left out there,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.
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All eyes are now on the Kansas City Federal Reserve’s 21-23 August Jackson Hole symposium, where Fed chair Jerome Powell is due to speak on the economic outlook and the central bank’s policy framework on Friday. Focus will be on what Powell says about the near-term outlook for rates, with traders almost fully pricing in a rate cut next month. — Rae Wee, (c) 2025 Reuters
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