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

Wee

Markets in Europe were set for a dour opening on Wednesday,

after a slump on Wall Street pushed Asian shares into the red,

with technology stocks leading the decline.

While there was no immediate trigger, analysts pointed to a

confluence of factors, such as doubts over the lofty valuations

of tech heavyweights and President Donald Trump's growing

influence over the sector.

U.S. Commerce Secretary Howard Lutnick is looking into the

government taking equity stakes in Intel ( INTC ) as well as

other chip companies in exchange for grants under the CHIPS Act

that was meant to spur factory-building around the country,

sources told Reuters.

The move comes on the back of other unusual deals Washington

has recently struck with U.S. companies, including allowing AI

chip giant Nvidia ( NVDA ) to sell its H20 chips to China in

exchange for the U.S. government receiving 15% of those sales.

The government's intervention in corporate matters has

worried critics who say Trump's actions create new categories of

corporate risk and that a bad bet could mean a hit to taxpayer

funds.

"This U.S. state/Presidential creep into tech, and the wider

private sector, is unhealthy as it threatens to erode margins

and dent demand/topline," said Mizuho's head of macro research

for Asia ex-Japan Vishnu Varathan.

Asia's tech-heavy indexes in Taiwan and South Korea

slid 2.6% and 1.7%, respectively, while EUROSTOXX 50

futures shed 0.7%. Nasdaq futures were down

0.5%.

Apart from the tech gloom, traders in London will be waking

up to UK inflation figures, where expectations are for headline

consumer prices to have picked up slightly in July on an annual

basis.

Inflation in Britain remains the highest of any major

advanced economy and is around one percentage point more than in

the United States or the euro zone.

Any upside surprise would prove a headache for the Bank of

England, with economists polled by Reuters expecting the central

bank to cut interest rates by a quarter-point once more this

year and then again in early 2026.

Elsewhere in markets, the New Zealand dollar

tumbled on Wednesday after the central bank cut rates and

flagged further reductions in coming months as policymakers

warned of domestic and global headwinds.

The Reserve Bank of New Zealand said the economy had stalled

in the second quarter, and lowered its projected floor for the

cash rate to 2.55%, from 2.85% forecast in May.

Key developments that could influence markets on Wednesday:

- UK inflation (July)

- FOMC July meeting minutes

- Fed's Waller, Bostic speak