The Swiss Market Index (SMI) was expected to open marginally lower on Wednesday, with 19 of 20 components in negative territory. Julius Bär projected the benchmark down 0.08% ahead of the session, following a 0.13% gain on Tuesday. Geberit was the sole advancer among SMI stocks, rising 4.5% after releasing half-year results.
DocMorris surged 8% following its earnings announcement, while BKW shares fell 3%. Burckhardt Compression gained 2% after announcing layoffs, and Straumann advanced 2.4% on half-year figures and a new CEO appointment. The SMI was also seen down 0.13% at IG Bank.
Rising global bond yields, near multi-decade highs, pressured risk assets. The 30-year U.S. Treasury yield hit its highest level in nearly 20 years, while 10- and 30-year German Bund yields climbed to 2011 peaks. Concerns over unsustainable government debt levels weighed on investor sentiment.
Geberit remained in focus as investors awaited its half-year results. The broader market reaction reflected broader concerns over elevated long-term yields and geopolitical tensions, particularly in the Middle East. U.S. President Donald Trump stated no negotiations were planned with Iran, adding to regional instability.
Oil prices climbed, with Brent crude up 0.7% at $91.61 per barrel and U.S. WTI rising 0.8% to $85.61, driven by stalled negotiations to reopen the Strait of Hormuz for oil tankers. The dollar strengthened slightly against the yen, trading at 159.31, near the 160 level that could trigger Bank of Japan intervention. The euro held steady at $1.1584, while the Swiss franc was little changed at 0.9400 per euro and 0.8116 per dollar.
U.S. equities retreated on Tuesday, with the Nasdaq 100 down 1.68% to 29,490.96, the S&P 500 falling 0.69% to 7,691.76, and the Dow Jones Industrial Average slipping 0.22% to 53,343.40. Rising long-term yields and climbing oil prices, exacerbated by the ongoing Iran conflict, dampened appetite for riskier assets.
AI-related stocks, including Nvidia, Micron, Sandisk, and Marvell Technology, saw declines of 2.3% to 9%, with the Philadelphia Semiconductor Index dropping 5%. Meta shares fell 4.5% amid a child exploitation lawsuit. Caterpillar shares slipped 4.6% as its ties to data center energy demand weighed on sentiment.
UGI surged 9.4% after reports of a $9 billion takeover bid from KKR, while Baidu shares tumbled 12.7% following weaker-than-expected second-quarter earnings driven by soft online advertising revenue.
