European stocks look set to open a tad lower on Wednesday as investors keep a wary eye on soaring U.S. bond yields.
U.S. Treasury yields hit one-year highs, a sign of confidence in the economic outlook and expectations of rising inflation on the back of extraordinary fiscal and monetary stimulus.
U.S.-China tensions also remain on investors' radar, with U.S. President Joe Biden warning on Tuesday that China will pay a price for its human rights abuses.
"We must speak up for human rights. So we are," said Biden in response to a question at a televised event on the Asian nation's handling of Muslim minorities in its far western region of Xinjiang.
Asian markets are broadly lower and gold prices fell, while the U.S. dollar rebounded from three-week lows.
Bitcoin topped $50,000 for the first time amid increased support from corporate heavyweights while oil held above $60 a barrel.
Investors await U.S. reports on retail sales, industrial production and homebuilder confidence as well as the minutes from the Federal Reserve's January policy meeting later in the day for any signs of recovery.
U.S. stocks hit record intraday highs overnight before ending on a mixed note as investors reacted to positive manufacturing activity data in New York State and a surge in bond yields.
The Dow Jones Industrial Average inched up 0.2 percent to reach a fresh record closing high as Democrats continued to move forward with President Biden's proposed $1.9 trillion relief package.
The tech-heavy Nasdaq Composite eased 0.3 percent while the S&P 500 ended flat with a negative bias.
European stocks ended on a lackluster note Tuesday after recent big gains. The pan European Stoxx 600 ended little changed with a negative bias.
The German DAX dropped 0.3 percent and the U.K.'s FTSE 100 slipped 0.1 percent, while France's CAC 40 index finished marginally higher.
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December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.