Global stocks are dropping on fears of weak US earnings, another Brexit delay, and further Hong Kong disruption

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 13, 2019. REUTERS/Eduardo MunozTraders work on the floor at the New York Stock Exchange (NYSE) in New YorkReuters

  • Global stocks dropped on Wednesday as traders reacted to a weaker outlook for Texas Instruments, the prospect of another delay to Brexit, and reports of a potential change of leadership in Hong Kong.
  • The microchip maker projected a revenue decline of 10% to 17% this quarter, fueling fears of weakening demand in the broader technology sector.
  • Britain's parliament voted in favor of Prime Minister Boris Johnson's Brexit deal on Tuesday, but rejected his plan to rush through legislation to take the UK out of the European Union this month, meaning another delay looks likely.
  • The Chinese government is drafting a plan to replace Hong Kong's chief executive, Carrie Lam, with an interim replacement as protests continue to rock the region, according to the Financial Times.
  • View Markets Insider's homepage for more stories.

Global stocks dropped on Wednesday as traders reacted to disappointing earnings from Texas Instruments, the prospect of another delay to Brexit, and a potential change of leadership in Hong Kong.

The US microchip maker, widely seen as a proxy for the worldwide semiconductor industry, projected a revenue decline of 10% to 17% this quarter, according to Reuters. Its depressed outlook fueled fears that President Donald Trump's trade war with China is sapping demand for technology products and services.

"The chipmaker is a clear drag today on sentiment," Neil Wilson, chief market analyst for Markets.com, said in a morning note.

Wider weakness in corporate earnings has raised concerns of a slowing US economy. Following the release of third-quarter earnings from a fifth of companies in the S&P 500, FactSet expects overall earnings to drop for a third consecutive quarter, by 4.7%, the Wall Street Journal reported.

Britain's parliament voted in favor of Prime Minister Boris Johnson's Brexit deal on Tuesday, but rejected his plan to rush legislation and pull the UK out of the European Union by the end of this month. The government has requested a three-month extension to the departure deadline.

"Uncertainty prevails for the time being, but Parliament has backed a deal and that feels like a key moment," Wilson added.

Meanwhile, the Chinese government is drafting a plan to replace Carrie Lam - Hong Kong's chief executive - with an interim leader, according to the Financial Times. Lam has been under pressure to resign for weeks as protests continue to rock the region.

Here's the market roundup as of 11:52 a.m. in London (6:52 a.m. ET):

European stocks are broadly lower with Germany's DAX down 0.1%, France's CAC 40 down 0.6%, the Euro Stoxx 50 down 0.4%, and Britain's FTSE 100 up 0.1%.

Asian indexes closed lower with the Shanghai Composite down 0.4% and Hong Kong's Hang Seng down 0.8%. Japan's Nikkei rose 0.3%.

US stocks are set to open in the red. Futures underlying the Dow Jones Industrial Average slid 0.4%, while S&P 500 and Nasdaq futures dipped 0.2%.

Oil prices have dropped sharply with West Texas Intermediate crude down 1.2% at $53.90, and Brent crude down 0.8% at $59.20.

Gold rose 0.5% to $1,495.

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