Asia sold off overnight on renewed Middle East conflict and a fresh leg up in oil, and US futures are following it lower into the cash open.
The Nikkei slipped toward 66,000 even as the Topix bucked the tape and extended a nine-session win streak, a split that says the damage was concentrated in semis and AI names like Tokyo Electron and Advantest rather than a broad Japan de-risking. Hang Seng underperformed, down close to a percent with tech leading, while the CSI 300 and Shanghai Composite were comparatively resilient on modest declines. Kospi and Kosdaq were the session's worst, down more than a percent as the tech-heavy Korean complex tracked Wall Street's late-August chip weakness. USD/JPY is pinned near 159.7-160, its softest yen levels in a month, with JGB yields pushing toward 3% on growing bets the BoJ moves in September. USD/CNH is comparatively quiet, holding a tight range as the fix stays steady.
US futures are pointing to a soft open, Dow futures off roughly 240 points, S&P down about half a percent, Nasdaq underperforming near 1% as Treasury yields extend their climb. That's the same trade driving Asia: oil-fed inflation fear stacking on top of hawkish Fed rhetoric from Chair Warsh, with fed funds futures now pricing better than two-thirds odds of a September hike. Today's ISM manufacturing print and JOLTS data are the swing factors before Friday's payrolls.
The risk: a hot ISM prices in the hike further and drags duration-sensitive growth names lower, while any de-escalation in the Middle East or a soft ISM/JOLTS pair could snap yields back and flip this into a relief bid by the cash open.