Global stocks give up some of this week's gains as rising bond yields and oil prices fuel stagflation fears

• US stocks slipped in early-morning trading on Wednesday as investors braced for Friday's inflation data.
• 10-year Treasury yields climbed back above 3% and oil held above $120 a barrel.

US stocks fell in European trading on Wednesday after finishing the previous session in the green, as rising bond yields and oil prices spooked investors.

Dow Jones futures led the sell-off, falling 0.35%. The Nasdaq and S&P 500 slipped 0.20% and 0.34% respectively in early trading.

Bond yields held steady, with 10-year US Treasury yields rising 4 basis points to 3.01%. Brent crude oil also posted further gains, rising 0.42% to $121.08 a barrel.

Rising commodity costs, combined with the World Bank slashing its global growth forecast from 4.1% to 2.9%, are feeding into investors' stagflation fears. The OECD also downgraded its global growth projection by 1.5 points.

"High energy prices are already crippling economies around the world, and the price of oil has edged up again," Susannah Streeter, an investment and markets analyst at Hargreaves Lansdown, said. "As warnings ricochet around about persistently higher prices and slowing growth, the more positive sentiment at the start of the week which helped propel two straight sessions of gains on Wall Street looks set to fade away today."

It was a mixed day for global equities, with the MSCI World Index up 0.3%, led largely by gains in Asian markets.

Asian stocks rallied as China continued to resume more normal activity after ending lockdown measures. Hong Kong's Hang Seng closed 2.24% higher, while the Nikkei 225 and Shanghai Composite posted gains of 1.04% and 0.68%, respectively.

But European markets tumbled, with the STOXX 600 down 0.32%, Paris' CAC 40 sliding 0.39%, and Frankfurt's DAX 40 slipping 0.22%.

Investors are nervously awaiting the European Central Bank's next policy meeting on Thursday at which it is likely to provide more clarity on future interest rate hikes.

"This week's ECB meeting will be an important one despite no rate hike being expected," Jefferies strategist Mohit Kumar said. "Given the current diverse opinions on the ECB policy path, and the ongoing debate between the hawks and doves, Thursday's meeting will be crucial for ECB's communication."

The dollar benefited from Wednesday's uncertainty, rising 0.36%. Bitcoin's daily price swings continued, as it rose 2.96% to $30,441.

Read more: The stocks to buy — and the ones to avoid — after the ECB raises interest rates this summer, according to 2 bankers