MARKET WRAPS
European stock indexes opened mostly higher Wednesday, with utilities and mining stocks leading the continent.
Bond yields eased, as diminished expectations for Fed rate hikes in the near term boosted risk appetite and paused the climb in Treasury yields.
Oil prices are up, reversing earlier losses, amid signs of a continued recovery in Persian Gulf crude exports easing some supply concerns.
Meanwhile, shares of European semiconductor companies were in the green as investors await Micron Technology results after the U.S. market closes.
Economic Insight
French inflation was higher than expected this month, reflecting enduring energy-price pressures that could push European Central Bank policymakers to raise interest rates again next month.
The global government bond market is likely to remain under pressure in the short term, as no change is expected for either energy prices or economic data, Erste Group said.
U.S. Markets:
Stock futures were higher with the main indexes all set to rise.
The Bureau of Economic Analysis is expected to release August's personal consumption expenditures price index and its third estimate of second-quarter economic data at 8:30 a.m.
The data will give a further indication on the rate outlook after markets significantly scaled back expectations of Fed rate rises following New York Fed President John Williams' comments.
Meanwhile, a stronger-than-expected U.S. jobs report on Friday "might actually be temporary bad news for markets as it could reinforce the need for another rate hike this year," Russell Investments said.
Forex:
Sterling rose to a one-month high against the euro after data showed the U.K. economy grew more than previously estimated in the second quarter.
The dollar eased after reaching a two-month high Tuesday after softer-than-anticipated data and Fed speeches lowered expectations for U.S. interest-rate rises.
Bitcoin fell as continued uncertainty over the Middle East conflict kept investors cautious over risky assets.
Bonds:
Gross government bond issuance in the eurozone is set to remain elevated in October, while supply of bonds with maturities exceeding 10 years is projected to fall according to Citi.
Eurozone government bond yields, gilts and Treasury yields all declined in early trade.
Energy:
Oil prices fell as investors weighed uncertainty over U.S.-Iran talks and a recent pickup in Middle East crude exports.
"For now, that reduces fears of an immediate crude shortage and explains why prices can fall even though talks between the U.S. and Iran have made no clear progress," XS.com said.
Metals:
Gold prices rose more than 1% as Treasury yields retreated.
Uranium prices are heading higher over the medium term which could push prices over $100 a pound by the end of the year, Berenberg said.
EMEA HEADLINES
Flight to Israel Makes Emergency Landing in Saudi Arabia
TEL AVIV-A FlyDubai flight traveling from the United Arab Emirates to Israel made an emergency landing Wednesday in Saudi Arabia after the aircraft went through an extreme descent and rise in flight, preliminary flight-tracking data showed.
FlyDubai, the sister airline to the long-haul carrier Emirates, didn't explain what happened in the flight for the Boeing 737 aircraft, only saying that it "experienced an incident while en route." The plane landed in Tabuk in western Saudi Arabia and "all passengers are safe and accounted for," the carrier added.
Greggs Plans to Close Four Manufacturing Sites, With 740 Jobs at Risk
Greggs said it plans to close four sites as part of a restructuring of its manufacturing operations, a move that could lead to 740 job losses.
The U.K. bakery chain said Wednesday that the proposal to consolidate its in-house manufacturing activities is the result of a review that aims to ensure it operates in the most cost-efficient manner. The company employs around 33,000, according to its website.
The U.S. Military Exits Iraq, Leaving Behind a Nation in Peril
BAGHDAD-After spending more than 23 years and $1.7 trillion, America is winding down what critics have called its forever war in Iraq, closing the last major U.S. military base on Wednesday.
"We don't think we need the military there anymore," President Trump said during a White House visit by Iraqi Prime Minister Ali al-Zaidi in July. "We have a fantastic champion, a new champion," the president said. "He's young, and he's handsome."
GLOBAL NEWS
Wall Street's Hopes for a Blockbuster IPO Season Are Fading
Market choppiness and artificial-intelligence safety fears are spooking investors and throwing into disarray what was expected to be a string of blockbuster IPOs this fall.
Smart-ring maker Oura was the latest company to postpone its initial public offering when it said Tuesday it was delaying the offering because of "uncertainty in the IPO market."
How the Pentagon Is Escalating Trump's Drug War in Latin America
One year after it began striking boats suspected of ferrying drugs, the Pentagon is dramatically expanding the military's role in tracking drug cartels across Latin America and the Caribbean, deploying high-tech drones to map smuggling networks and sending U.S. troops to assist in ground raids.
The top general in charge-a Marine four-star who spent years disrupting terror networks in the Middle East-said in a recent interview that the goal is to help countries in the region step up antidrug operations with U.S. assistance.
Trump Defends Light-Touch AI Strategy After Industry Sounds Alarms
WASHINGTON-President Trump promised not to hamper the artificial-intelligence industry with regulations, doubling down Tuesday on his light-touch approach despite growing calls from Silicon Valley and the public for new guardrails.
"I will never stifle the growth of technology that will be bigger than the industrial revolution," he said at an event to unveil a new America.gov website built with AI to make it easier for citizens to access federal government services. The Justice Department, Federal Bureau of Investigation and existing authorities are sufficient to hold accountable bad actors using AI for nefarious purposes, he said.
Write to nina.kienle@wsj.com