1. U.S. data in focus
Market players looked ahead to the release of key U.S. data later in the session amid ongoing uncertainty over the timing of a Federal Reserve rate hike.
The U.S. was to release the ADP jobs report for August at 8:15AM ET, followed by reports on productivity and costs at 8:30AM and factory orders at 10:00AM.
The Federal Reserve's Beige Book on regional economic activity is scheduled for release at 2:00PM as traders look for hints regarding the timing of a potential rate hike.
Investors also awaited Friday’s nonfarm payrolls report, which could help to provide clarity on the likelihood of a near-term interest rate hike.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
2. Wall Street set to bounce after brutal selloff
U.S. stock futures pointed to strong gains at the open on Wednesday, as markets attempt to recover from a brutal selloff suffered during the previous session.
During early morning hours in New York, the blue-chip Dow futures rose 92 points, or 0.57%, the S&P 500 futures tacked on 12 points, or 0.6%, while the Nasdaq 100 futures indicated a gain of 28 points, or 0.67%.
On Tuesday, U.S. stocks suffered their third-worst daily loss of the year to end in correction territory, as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
3. Shanghai rollercoaster ride continues
The Shanghai Composite took investors on another volatile ride on Wednesday, tumbling by as much as 4.6% after the open, before paring losses after the midday break to end down 0.4%.
China’s stock markets are closed Thursday and Friday for the World War Two Victory Day parade.
Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities and emerging-market assets.
4. Crude oil futures extend losses
Crude oil futures extended heavy losses from the prior session on Wednesday, as investors focused on the deteriorating outlook for China and its impact on the global economy.
U.S. crude was down 2.5% at $44.25 a barrel while Brent lost 1.75% to $48.68 a barrel.
The U.S. Energy Information Administration was to release its weekly report on oil supplies at 10:30AM ET. The data was expected to show that crude stockpiles rose by 0.1 million barrels last week, while gasoline supplies were forecast to decline by 1.4 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 7.6 million barrels in the week ended August 28, compared to expectations for a drop of 0.8 million.