European stocks slipped and U.S. equity futures pulled back Wednesday as investors stepped away from multi-year and all-time highs amid a surge in global oil prices and what could be a prophetic rise in government bond yields.
The Stoxx 600 benchmark, the region's broadest measure of share prices, was marked 0.21% lower at 399.25 points in the opening minutes of trading after breaching a two-and-a-half year high Tuesday following stronger-than-expected industrial data from Germany and the fastest decline on record for Eurozone unemployment. Germany's DAX performance index fell 0.32% in the opening hour of trading while Britain's FTSE 100 clawed its way into positive territory, rising 0.13% thanks to solid gains for oil majors BP plc (BP) and Royal Dutch Shell plc (RDS.A) after crude prices touched a three-year high in Asia trading.
Early indications from U.S. futures suggest a rare day of declines on Wall Street, with contracts tied to the Dow Jones Industrial Average marked 54 points lower than their Tuesday close and those linked to the broader S&P 500 slipping 7 points, or 0.25%, from yesterday's record high and its best start to a year since 1987.
The moves followed a sharp rise in U.S. government bond yields Tuesday and again in overnight Asia trade which took benchmark 10-years to 2.555%, the highest since March 20, while 2-year note yields edged past their 2008 highs to 1.97%.
Overnight in Asia, investors used the lull in equity market sentiment to books profits in market that has hovered around 10-year and all-time highs for several weeks, with the MSCI Asia ex-Japan index falling 0.43%, pulled lower by notable downside moves in the tech sector following Tuesday's disappointing earnings guidance from Samsung Electronics Co. (SSNLF) Japan's Nikkei 225 was also in retreat mode, falling 0.3% from its 1991 highs to end the session at 23,78.20 points.
Global oil prices extended gains in both Asian and European trading after data from the American Petroleum Institute Tuesday showed that domestic U.S. crude inventories fell by a much larger-than-expected 11.2 million barrels last week. Alongside a modest decline in U.S. drilling installations and ongoing discipline from OPEC members on production cuts, the moves have pushed oil to the highest levels since 2014.
Brent future contracts for March delivery were marked 0.4% higher from their Tuesday close at $69.12 while WTI contracts for the same month were seen 0.65% higher at $63.39 per barrel.