(REUTERS)

Wall Street stocks recovered on Wednesday after Alphabet gained on a favourable antitrust ruling and investors awaited labour market data that could influence the central bank's upcoming interest-rate decision.

Alphabet jumped around 8% in early trading, while Apple also gained about 2% as the ruling allowed Google to continue lucrative payments to the iPhone maker. Broadly, the Dow Jones Industrial Average was little changed, the S&P 500 rose 0.4%, and the Nasdaq Composite added 0.73%.

At the same time, a sell-off in global long-dated bonds sent Japan's government borrowing costs to record highs on Wednesday, as mounting concerns over government debt sustainability and long-term inflation also rattled investors in Europe.

Spot gold hit an all-time high of $3,557 as the rush out of long-term government debt, traditionally considered low-risk, sparked a hunt for alternative safe-haven assets.

The 30-year Japanese government bond yield hit an unprecedented 3.28% on Wednesday, following a sell-off in similarly dated British gilts, US Treasuries and Canadian bonds in the prior session.

On Wednesday, British 30-year gilt yields rose 6 basis points to a fresh post-1998 high of 5.752%, before recovering to last trade at 5.65%.

Germany's 30-year yield stood at 3.37%, remaining close to its highest level in 14 years.

The global trend would likely feed on itself, some analysts said, because higher yields in Japan meant Japanese savers who had for decades looked to overseas assets for income now had fewer reasons to buy non-domestic government debt.

Ripple Effect

The gap between 2-year and 30-year US government bond yields stands at about 130 bps, around its highest since December 2021, while the comparable measure in Britain is the highest since 2017.

The 30-year US Treasury yield briefly rose above 5% during Asia trade and last stood at 4.971% and, with yields at this level, investors are starting to watch for spillovers into other asset classes.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.1%.

European stock markets remained unscathed as traders pinned their hopes on an anticipated U.S. rate cut later this month, with Europe's STOXX index up 0.46%.
But Japan's broad Topix share index closed almost 1.1% lower and MSCI's broad index of Asia-Pacific shares outside Japan dropped 0.4%.

Tariff Tremors

European purchasing managers' indexes on Wednesday, viewed as barometers of overall economic conditions, showed expansion in Germany had slowed and France remained in contractionary territory as businesses dealt with US President Donald Trump's tariff policies.

Trump on Tuesday said his administration would ask the Supreme Court for an expedited ruling on tariffs that an appeals court found illegal last week. The court allowed for the tariffs to stay in place until October 14.

US manufacturing also contracted for a sixth straight month in August as factories grappled with the impact of import tariffs, data showed on Tuesday, helping to drive Brent crude oil 1.4% lower to $68.16 a barrel on Wednesday.

Friday's US nonfarm payrolls data will be preceded by data on job openings and private payrolls, offering an update on the labour market that has become the focus of policy debate at the Fed.