US stock futures drifted in Asian trade on Wednesday after the market staged a dramatic intraday rebound, as falling Treasury yields provided a boost to growth-oriented technology stocks. Futures contracts tied to the three major indexes drifted flat to slightly negative. In regular trading on Tuesday, US stocks came well off the day’s lows, with the Nasdaq Composite gaining 1.75% and the S&P 500 adding 0.16%. Meanwhile, the Dow erased much of the day’s losses, but still closed 0.42% lower. Technology stocks outperformed on Tuesday as Treasury yields tumbled on recession fears, while energy firms lagged behind the market on falling oil prices. Concerns that the Federal Reserve’s aggressive fight against inflation might catalyze an economic downturn have been weighing on markets. Investors now look ahead to the minutes of the last central bank meeting, manufacturing PMI data and the JOLTS report due later on Wednesday.

Gold stabilized around $1,770 an ounce on Wednesday following a sharp selloff in the previous session that pushed bullion to a seven-month low, as mounting recession fears drove investors out of commodities and into the safe-haven dollar. The metal also came under pressure from aggressive interest rate hikes globally aimed at curbing high inflation, with the pace of policy tightening among major central banks expected to continue in the second half of 2022. Last week, Federal Reserve policymakers cemented expectations for further monetary tightening, signaling another 75 basis point rate hike in July to arrest surging prices. The European Central Bank is also expected to start raising interest rates this month and bring borrowing costs into positive territory in the third quarter.

The Shanghai Composite fell 1% to around 3,370 while the Shenzhen Component lost 0.7% to 12,883 on Wednesday, retreating further from four-month highs, as a highly uncertain Covid situation in China threatened the country’s economic recovery, which calls for sustained and targeted policy support. The number of cities restricting local movement more than doubled in a week to 11 as of Monday, with the latest measures affecting regions that account for about 14.9% of the country’s GDP, according to Nomura. Resource-related stocks led the decline on weaker commodity prices, with losses from CNOOC Ltd (-5.7%), Zijin Mining (-3.1%) and Henan Shenhuo (-5%). Transportation and consumer stocks also fell, including Cosco Shipping (-2.4%) and ChongQing Sokon (-4.6%). Meanwhile, heavyweight technology and new energy names resisted the decline.

The Nikkei 225 Index fell 1.2% to around 26,090 while the broader Topix Index lost 1.3% to 1,855 on Wednesday, erasing gains from the previous session, as mounting fears of a potential recession spurred a fresh wave of selling in equities and other risk assets. Such fears were driven by aggressive interest rate hikes among major central banks aimed at curbing high inflation. Commodity-linked stocks led the decline on weaker oil and metals prices, with sharp losses from Inpex Corp (-9.8%), Eneos Holdings (-5.9%), Osaka Titanium (-6.6%), Nippon Steel (-2.9%) and Sumitomo Metal (-6.3%). Other index heavyweights also dropped, including Tokyo Electric Power (-7.4%), Mitsubishi UFJ (-3.9%), Toyota Motor (-2.7%), Fast Retailing (-2.9%) and Sony Group (-2.5%). Meanwhile, technology and healthcare stocks mostly advanced.

The S&P/ASX 200 Index eased 0.2% to below 6,620 on Wednesday, snapping a two-day advance, as mounting fears of a global recession weighed on energy and mining stocks. Such fears were driven by aggressive interest rate hikes among major central banks aimed at curbing high inflation. Energy stocks led the decline after oil prices tumbled overnight as markets price in a potential recession. Sector leaders Woodside Energy and Santos Ltd dropped 4.8% and 3.9%, respectively. Australian miners also slumped on weaker metals prices, including BHP Group (-4.2%), Fortescue Metals (-4.7%), Rio Tinto (-4.9%), Newcrest Mining (-5.2%) and Pilbara Minerals (-2.7%). Meanwhile, technology shares tracked Wall Street higher, with gains from Xero Ltd (5.9%), Wisetech Global (5.1%) and Block Inc (4.4%). Financial, consumer and healthcare stocks also advanced.

The British pound fell more than 1% towards $1.19, hitting its lowest point since the pandemic outbreak in March 2020, following news of the resignation of the British Finance minister Rishi Sunak. The former minister posted his resignation letter to the Prime Minister on Twitter, minutes after Health Secretary had also decided to leave the Boris Johnson-led government. The Tory resignations have brought back concerns over another no confidence vote in the British parliament, following months of political instability within the party and over the party-gate investigations. Earlier, the sterling pound was already facing downside pressure amid growing concerns about a looming recession, uncertainty over the Northern protocol and softening expectations about the scope of the Bank of England’s tightening outlook, after it reiterated concerns about the UK economy outlook in its latest Financial Stability Report.