Global Markets: Stocks shed early losses; sterling tumbles on Brexit jitters

A gauge of equities worldwide shed early losses on Wednesday as Wall Street stocks rose despite looming recession jitters, while sterling tumbled as Britain's prime minister moved to restrict parliamentary time before the country's planned departure from the European Union.

The advance in U.S. stocks propelled the MSCI-All Country World Index to a 0.26 percent gain, even though the pan-European STOXX 600 fell 0.14 percent. As stocks recovered, safe-haven assets such as gold and the Japanese yen turned negative on the day, though still near recent highs. U.S. Treasury prices also eased.

Still, risk appetite was muted as yields on 30-year U.S. Treasuries touched all-time lows earlier in the session and were below those of 3-month bills. The yield curve between 2-year and 10-year notes remained inverted.

An inversion of the yield curve - where yields on shorter-dated debt are above those on longer-dated paper - has historically been a highly accurate predictor of a U.S. recession.

"It's become very difficult for investors to garner an idea of where we go to next," said Michael Hewson, chief market strategist at CMC Markets. "The weakness in bond yields and the strength in havens speaks to an investor that is becoming increasingly risk-averse."

The British pound dropped sharply after Prime Minister Boris Johnson set October 14 as the date for the formal state opening of a new session of parliament. The opening limits the time the parliament would sit before the planned date for Brexit on October 31. The news stoked fears of an economically disruptive no-deal departure from the EU.

Sterling was last down 0.45 percent against the dollar at $1.2232.

The Dow Jones Industrial Average rose 176.7 points, or 0.69 percent, to 25,954.6, the S&P 500 gained 14.87 points, or 0.52 percent, to 2,884.03 and the Nasdaq Composite added 23.83 points, or 0.3 percent, to 7,850.78.

Benchmark 10-year Treasury notes last rose 7/32 in price to yield 1.4677 percent, from 1.49 percent late on Tuesday.

In currencies, the dollar index rose 0.15 percent. The Japanese yen weakened 0.13 percent versus the greenback at 105.89 per dollar, but remained close to the 2-1/2-year high of 104.44 it hit on Monday.

Among commodities, spot gold dropped 0.4 percent to $1,536.45 an ounce, though not far off its six-year peak touched on Monday.

Spot silver added 0.6 percent to $18.27 an ounce after having hit $18.50, its highest level since April 2017.

Oil prices jumped as data showing a fall in U.S. crude stockpiles helped ease worries about weakening oil demand caused by the China-U.S. trade war. U.S. crude rose 2.15 percent to $56.11 per barrel and Brent was last at $60.61, up 1.85 percent on the day.