ASX futures were down 102 points, or 1.4 per cent, at 7175 at 6:15 am on Wednesday, indicating a bad start to the final day.

U.S. stocks dropped, widening their losses in April, as investors digested earnings reports from major companies and weighed concerns about inflation and the spread of Covid-19 in China.

Stocks fell for much of Tuesday, and fell further late in the session. The S&P 500 fell 2.8 percent, or 120.92 points, to 4175.20, a day after technology stocks had led the major indexes higher. The Dow Jones Industrial Average fell 2.4 percent, or 809.28 points, to 33240.18, and the Nasdaq Composite dropped 4 percent, or 514.11 points, to close at 12490.74.

The three indexes are headed for monthly losses of at least 4% and the Nasdaq, which on Tuesday recorded its largest one-day percentage fall since September 2020, is down more than 12% so far in April. The smaller-cap Russell 2000 ended the day at its lowest close since December 2020.

The Australian share market has delivered its worst session in two months, led downwards by brutal losses for the major miners and oil producers as China's strict COVID policies took their toll on prices for commodities.

The benchmark S&P/ASX200 index on Tuesday finished down 155.3 points or 2.1 per cent to 7,318, and the broader All Ordinaries dropped by 164.2 points, or 2.1 per cent, settling at 7,604.

It was the worst day for the local bourse since Feb. 24, the day Russia began its invasion of Ukraine, and comes on top of a rout of global markets on Friday, when the key Wall Street indexes tumbled almost three per cent.

“Clearly the (global) markets have been volatile during the time we’ve been on holiday, and we’re just catching up,” said Julia Lee, chief investment officer with Burman Invest.

Ms Lee blamed the losses on fears that China’s zero-COVID strategy would undermine demand for commodities. There had been panic buying in Beijing, which is conducting mass tests of its 21 million people, amid fears the city would be put under a full lockdown.

Tuesday’s decline pushed the ASX200 back into negative territory for the year, despite the index spending much of February and March retracing the sharp fall in January. It’s now 1.7 per cent in the red for the year.

The heavyweight materials sector was the biggest loser, dropping 5.1 per cent as the price of iron ore slipped to its lowest level since late February.

Fortescue Metals down 6.9 per cent at $19.76, BHP down 5.8 per cent at $45.66, Rio Tinto down 4.3 per cent at $108.76, South32 down 7.9 per cent at $4.46.

Mining services contractor Mineral Resources was down 9.9 per cent and BlueScope Steel was off 8.7 per cent.

Gold Miners offered no refuge, with Northern Star plunging 4.9 per cent and Newcrest dropping 2.9 per cent.

The energy sector shed 4.0 per cent after a fall in oil prices overnight, with Santos down 4.3 per cent and Woodside Petroleum down 4.6 per cent after it said production had eased slightly in the March quarter.

EML Payments tumbled 38.6 per cent to the lowest since October 2021 at $1.665 after cutting full-year earnings guidance by 8 per cent, with the Brisbane card payments company saying it was suffering “operational execution issues in Europe” that it anticipates continuing through midyear.

Pushpay rocked up 22.9 per cent to $1.18 after the Auckland-based church donation processor revealed it had been approached by third parties expressing unsolicited interest in buying the company.

Beach Energy staged a 3.9 percent decline after the oil producer said heavy rain had postponed work at its South Australian Cooper Basin wells, contributing to lower oil production in the March quarter.

At the same time, earnings at United Malt Group were being hit by a lack of rain, with the company saying it will incur between $20mn and $25mn in costs due to last year’s drought in Canada.

The world’s fourth-largest commercial maltster has had to import barley from Australia and Denmark to its processing plants in North America. UMG shares finished down.

The big four banks all fell, with NAB down 1.2 per cent to $32.74, Westpac losing 1.3 per cent to $23.90, ANZ down 0.6 per cent to $27.62 and Commonwealth down 0.6 per cent to $104.75.

Today will bring Australian inflation figures for the March quarter and quarterly earnings figures from US tech giants Microsoft and Alphabet.

In commodities, iron ore climbed 2.4%, to $US 138.95 a tonne; futures for gold added 0.1% to $US 1900.46 a barrel; Brent crude rose 3.2% to $US105.55 a barrel.

The yield on the Australian 10 Year bond was at 3.10%.

The Australian dollar lost 0.7% to 71.31 US cents.

Asia

Chinese stocks continued to decline on Tuesday after plunging on Monday to the worst one-day selloff in more than two years, amid rising concerns over the economic repercussions of the government’s lockdowns to quell Covid-19.

Coal miners and software companies weighed on the market, although individual shares jumped after they reported earnings. The Shanghai Composite Index dropped 1.4%, while the Shenzhen Composite Index shed 2.1%, and ChiNext Price Index closed 0.9% lower.

Stocks in Hong Kong finished higher as sentiment is buoyed by the Chinese central bank’s decision to cut the foreign exchange reserve requirement ratio in an effort to prop up the weakening yuan. The benchmark Hang Seng Index rose 0.3%. Chinese tech stars led the gains after the sector rallied on Wall Street overnight.

The Nikkei Stock Average rose 0.4%, aided by advances in electronics stocks as borrowing-cost worries receded slightly. Fujitsu rose 2.2% after a report that said the company is weighing the sale of a stake in its scanner unit. Among notable decliners was Sumitomo Metal Mining, which closed 6.8% down after it scrapped a feasibility study for a nickel refinery in Indonesia.

Europe

European markets largely drift lower following a muted opening to trading on Wall Street.

The Stoxx Europe 600, CAC 40 and DAX are down 0.9%, 0.5% and 1.2% respectively, while the FTSE 100 is slightly higher. Brent crude nonetheless gains 2.6% to $104.84 a barrel while gold and silver rates are mixed. The Dow drops 1.7%.

“Tuesday has delivered a sharp drop for US markets taking the European shine off too,” IG analyst Chris Beauchamp says in a note. “Investors are again worrying over economic growth, returning to the theme that prevailed at the end of last week.

North America

U.S. stocks dropped, adding to their April losses, as investors digested earnings reports from major companies and balanced fears about inflation and the spread of Covid-19 in China.

Stocks fell throughout much of Tuesday, and extended their decline late in the session. The S&P 500 closed down 2.8 percent, or 120.92 points, at 4,175.20, a day after tech stocks helped push major indexes higher.

The Dow Jones Industrial Average dropped 2.4 percent, or 809.28 points, to 33240.18 and the Nasdaq Composite fell 4 percent, or 514.11 points, to end at 12490.74.

All three indexes are poised to tumble at least 4% in the month, with the tech-heavy Nasdaq which posted its biggest one-day percentage drop on Tuesday since September 2020 having dropped more than 12% in April. The small-cap Russell 2000 ended the session at its lowest close since December 2020.

Microsoft shares dropped more than 2 percent in after-hours trading after the software maker reported earnings and revenue for its first quarter were above analysts’ expectations. Google parent Alphabet posted slower sales growth in the first quarter, sending its stock down more than 4% after the close.

Fears of a new wave of Covid-19 cases in China, as well as the strict lockdowns imposed there to combat a Covid-19 outbreak, have deepened investors’ anxiety about the global economy and added to the whiplash trading of recent sessions. Inflation is choking companies and consumers, while the Fed’s signals that it will soon tighten monetary policy threaten to hold back growth.

Havens in troubled times, such as Treasury bonds, have come under pressure from inflation and expectations for a tighter central-bank policy alongside stocks, adding to the confusion for investors who have been looking for shelter in the last month’s volatility. Gold, another haven, gained 0.4 percent on Tuesday, though prices remain close to their lowest level since February.

The yield on the 10-year U.S. Treasury note settled at 2.773%, compared with 2.825% Monday. The yield on the benchmark note is near its highest level since 2018 because investors have been selling bonds on expectations of higher interest rates. When prices fall, bond yields rise.

At the same time, a gauge of the yield on 10-year Treasury once inflation is factored in known as the real yield has climbed closer to positive territory, ending Monday at minus 0.10%, which could make riskier assets less appealing to investors.

In other earnings news, General Electric dropped more than 10 percent, or $9.29, to $80.59 after saying that supply-chain disruptions would weigh on its business this year. Universal Health Services tumbled almost 10 percent, or $13.44, to $125.32 after the hospital operator reported that earnings fell 27 percent in the first quarter from a year earlier.

United Parcel Service dropped about 3.5 percent, or $6.59, to $183.05. The company said quarterly revenue grew by more than 6%, though it delivered fewer packages than it did in the same quarter a year earlier. 3M fell 3%, or $4.38, to $144.22 after it reported first-quarter sales that topped estimates.

Tesla, whose shares soared last week after the electric-vehicle maker’s quarterly results, was down 12 percent, or $121.60, to $876.42, retreating to levels not seen since late March. The stock is included in the S&P 500’s consumer discretionary sector, which declined nearly 5%.