Morning Bid: Markets reckon with familiar September pain

A look at the day ahead in European and global markets from Rae Wee

Markets in Europe are set for a rocky start on Wednesday after Asia stocks were left in a sea of red, as worries over the global growth outlook resurfaced and as the blistering AI rally hit yet another speed bump.

U.S. and European stock futures sank, while MSCI's broadest index of Asia-Pacific shares outside Japan and Japan's Nikkei were headed for their worst sessions since Aug. 5, when worries about a slowing U.S. economy and an unwinding of Japanese yen carry trades pummelled global stock markets.

September has historically been a bad month for stocks, and it seems U.S. investors were eager to keep up with that tradition, after sending Wall Street sliding in their return from the Labor Day holiday.

Analysts say there is no one specific reason behind the latest market rout. Tepid U.S. manufacturing data could be blamed, but so could gloom over China's shaky economic recovery and Nvidia's record sell-off.

The $279 billion loss in market value of the AI darling hobbled technology stocks in Asia on Wednesday, with Japanese chip-testing equipment maker Advantest, a supplier to Nvidia, down 7%. Taiwan's TSMC fell 4%.

In commodities, concerns over waning global demand sent oil prices tumbling to their weakest level in nine months.

China's CNOOC Ltd led the slide in Hong Kong-listed oil shares, and was also headed for its biggest one-day percentage drop since Aug. 5.

Everything seems to point to another turbulent run for markets for now, with data on U.S. job openings later on Wednesday set to provide clues on the strength of the labour market.

Still, the focus remains squarely on Friday's U.S. nonfarm payrolls report for August, which could determine whether the Federal Reserve's expected rate cut this month will be regular or super-sized.

Until then, investors will be walking on eggshells, and the sell-off thus far may not be the last.

Key developments that could influence markets on Wednesday:

- France HCOB services PMI (Aug)

- Germany HCOB services PMI (Aug)

- Euro zone producer prices (Jul)

- U.S. JOLTS job openings (Jul)