A region-wide gauge of equities dropped 0.5%, as stocks also fell in Japan, South Korea and Australia. Futures for benchmarks in the US and Europe edged lower. 

Initial losses in Chinese equities deepened and the offshore yuan reversed an advance after the Caixin China services purchasing managers’ index was weaker than expected. The yuan’s drop came despite the central bank earlier maintaining its support for the currency in its daily fix. 

“This brings focus back on slowing growth momentum and the recent step-up in geopolitical angst,” said Charu Chanana, market strategist at Saxo Capital Markets.

In Japan, Rakuten Group Inc. shares fell after news that the e-commerce company took a step to list its online brokerage arm. The stock dropped as much as 2.9% amid market concerns over its debt levels.

The yield on the two-year Treasury fell four basis points to 4.9% as trading resumed on Wednesday following the Independence Day holiday in the US. The 10-year yield hovered around 3.84%.

The two-year yield on Monday exceeded the 10-year rate by the largest amount since March, when the key 2s10s segment of the yield curve became the most inverted since the 1980s.

The yen weakened slightly on Wednesday amid unease among policymakers in Tokyo over the currency’s recent depreciation. The Australian dollar, which is sensitive to China’s outlook, weakened following the release of the PMI data.

Elsewhere in markets, oil rose and gold was steady. DM