The Swiss stock market was seen lower on Wednesday before the open, extending a losing streak that could take the SMI to a third consecutive decline. In premarket trading at Julius Bär, the SMI was indexed 0.4% lower at 14,005 points, with 19 of its 20 components falling. Novartis was the only gainer, up 0.1%, while Amrize led losses at -1.2%, followed by UBS at -0.7% and Richemont at -0.5%. The broader market was also seen down about 0.3%.
New ratings and price targets included Bossard, where Berenberg raised its target to 265 francs from 250 while maintaining Buy; R&S, where Berenberg cut its target to 29 francs from 35 while maintaining Buy; and SMG, where Stifel initiated coverage with Buy and a 48-franc target.
The largest premarket moves were expected at DocMorris, down 3.5% after the company said it was issuing a new convertible bond, Bachem, up 0.7%, and Barry Callebaut, up 0.6%. Analysts said Barry Callebaut chief executive Hein Schumacher sounded noticeably calmer on cocoa markets and El Nino risk at the Barclays Global Consumer Staples Conference. Barclays said his tone contrasted sharply with investor concerns, adding that he viewed market reactions after the cocoa crisis as overly sensitive and saw the industry entering a second consecutive year of cocoa surplus. Schumacher also saw no sign that cocoa price volatility would push retail chocolate prices into stronger inflation.
European futures pointed lower, with the Stoxx 600 down 0.4% and the German Dax seen down 0.5%. At IG Bank, the SMI was 0.8% lower at 13,982.5 points. Negative cues from the United States were adding pressure. Investors also had US ADP labor-market data and the 10-year US Treasury auction in focus. In Switzerland, Bioversys and Medacta were due to report half-year results, and Richemont was holding a general meeting.
Asian equity markets were resilient on Wednesday despite escalating tensions in the Middle East. Japan's Nikkei 225 rose 0.4% to 65,495.23, and the broader Topix gained 0.3% to 4,063.61. China's Shanghai index rose 0.3% to 3,953.13, while the main index for Shanghai and Shenzhen advanced 0.3% to 4,571.03.
In Japan, enthusiasm for artificial intelligence outweighed concerns about the widening Middle East conflict. A billion-dollar fiber-optic deal between Verizon and Corning supported domestic cable makers. Maki Sawada, a strategist at Nomura Securities, said semiconductor and AI-related stocks were developing strongly and contributing positively to the Nikkei. Furukawa Electric was among the biggest gainers, up 13.2%, while Kyowa Kirin and Sumitomo Pharma fell about 5% each.
In China, attention focused on the impact of the Middle East conflict on the domestic economy. Houthi attacks on Saudi Arabia and US strikes on Iranian oil tankers were cited as drivers of higher energy costs, which lifted August inflation. Producer prices rose 3.8% and consumer prices rose 0.8%. Dong Lijuan, a statistician at China's National Bureau of Statistics, said higher international crude oil and base metal prices had pushed up prices in the corresponding sectors, while weak domestic demand dampened a broader price increase.
In Asian currency markets, the yen benefited from speculation about near-term rate hikes by Japan's central bank. The dollar fell 0.3% to 153.55 yen, rose to 6.7083 yuan and edged up to 0.8093 francs. The euro was little changed at 1.1628 dollars ahead of the European Central Bank's rate decision and rose slightly to 0.9410 francs.
On commodities, the military escalation between the United States, Iran and their allies fueled supply concerns. ING analysts said the latest developments reinforced their view that a resumption of peace talks remained distant. Brent crude rose 1.5% to $99.40 a barrel, while WTI gained 1.4% to $94.35.
In the United States, Tuesday's session after the long weekend was weak, with rising oil prices continuing to feed inflation and rate concerns. The Dow Jones Industrial Average fell 1.18% to 52,786.07, and the S&P 500 declined 0.58% to 7,673.52. The Nasdaq 100 was more resilient, down 0.12% to 29,507.70, as declines in large technology stocks such as Apple, Nvidia and Microsoft were largely offset by gains in AI-related names.
A market participant said risk appetite remained subdued ahead of the European Central Bank's decision on Thursday and US inflation data on Friday, with uncertainty also driven by Middle East tensions, including reports of explosions on an Iranian oil-export island.
Chip stocks extended Friday's gains, which traders still linked to OpenAI's announcement of a more powerful AI model. AMD, ARM and Broadcom rose by as much as 5.9%. Intel jumped 9% after DigiTimes reported that the processor maker was expected to raise prices, with a Northland Securities upgrade also cited as supportive. Qualcomm gained 3% after saying it had entered a partnership with Amazon to supply custom data-center chips, accompanied by options to buy shares.
Quantum computing stocks were also in demand. D-Wave Quantum, Rigetti Computing and Quantinuum said they would each receive $100 million in minority stakes from the US Commerce Department to expand research in the field.
Oil stocks benefited from higher crude prices, with Chevron, ExxonMobil and ConocoPhillips rising by as much as 0.8%. The November Brent contract continued to approach the $100 mark, with Houthi attacks on Saudi Arabia also cited on the oil market.
