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European and US stock markets moved lower Wednesday as investors focused on company earnings, bond yields and the outlook for the US and Chinese economies.

The dollar rose against major rival currencies and oil prices retreated.


鈥楻ising Treasury yields continue to be a major topic of conversation mainly because the market isn鈥檛 entirely clear about why they are going up like they are,鈥� said market analyst Patrick O鈥橦are at Briefing.com.

The yield on 10-year US government bonds has risen to 4.24 per cent from 3.73 per cent one month ago.

鈥楢 more market-friendly explanation suggests they are a byproduct of an improved growth outlook that bodes well for earnings,鈥� said O鈥橦are.

鈥楢 less market-friendly explanation is that rising Treasury yields reflect burgeoning concerns about the budget deficit and inflation heating up again,鈥� he added.

With the US聽economy聽in rude health, bets on another bumper cut to interest rates at the Federal Reserve鈥檚 next meeting have dwindled, supporting the dollar.

鈥楢nother key factor has been the Trump Trade,鈥� said Daniela聽Sabin Hathorn, senior market analyst at聽Capital.com.

The Trump Trade describes investors acting in expectation of the economic and political policies of a potential second Trump administration.聽

鈥楤etting odds now show a 60-38 advantage for Donald Trump and markets are clearly agreeing with this with yields and the dollar pushing higher as traders expect a rise in public spending and inflation if he is elected,鈥� said Sabin Hathorn.

US bond yields are at their highest since July, with analysts arguing that a Trump win could see a renewed rise to inflation as the former president favours tax cuts.

Independent analyst Stephen Innes said the Trump Trade 鈥榟as shaken the bond market, forcing some bond traders to pull their heads out of the sand as real jitters emerge about the fiscal landscape post-election.鈥�

Investors were also keeping tabs on corporate earnings reports.

Shares in Boeing dropped 2.1 per cent after the aerospace giant reported a whopping $6.2 billion quarterly loss as a nearly six-week labour strike weighed on its commercial plane division and costly problems dragged down its defence and space business.

About 33,000 IAM workers in the US Pacific Northwest walked off the job on September 13. The union is slated to vote on a new contract that could end the stoppage later Wednesday.

Tesla reports after the US markets close.

Away from company results, shares in Tokyo Metro rocketed 45 per cent in Japan鈥檚 biggest initial public offering for six years.

Gold struck yet another record high with the precious metal profiting from its haven status as markets struggle to nail down a winner in the upcoming US presidential election and owing to fears of an escalating crisis in the Middle East.聽

Crude futures slid more than one per cent having shot higher Tuesday on an indicator pointing to increased demand in China which is taking measures to stimulate its flagging聽economy, the world鈥檚 second biggest after the United States.