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Markets in Europe are set for a rocky start on Wednesday after Asia stocks were left in a sea of red, as worries over the global growth outlook resurfaced and as the blistering AI rally hit yet another speed bump. U.S. and European stock futures sank, while MSCI's broadest index of Asia-Pacific shares outside Japan and Japan's Nikkei were headed for their worst sessions since Aug. 5, when worries about a slowing U.S. economy and an unwinding of Japanese yen carry trades pummelled global stock markets.

Investors were disappointed by Tuesday's manufacturing data, which amplified fears that the US economy may be headed for a slowdown.

(Bloomberg) -- Asian semiconductor-related stocks tumbled, putting regional benchmarks on course for their worst drops in a month amid renewed concerns of overheating in the artificial intelligence rally.Most Read from BloombergHow Air Conditioning Took Over the American OfficeHong Kong’s Arts Hub Turns to Selling Land to Stay AfloatThe MSCI Asia Pacific Index fell as much as 2.2%, the most since the Aug. 5 panic selloff. Taiwan’s Taiex tumbled as much as 5.3% while Japan’s Topix slid 3.4% and K

"Equities seem more excited about the cuts than concerned about a potential recession," strategists at Bank of America said.

The next jobs data, due Friday, could further broaden the stock's rally beyond tech shares if nonfarm payrolls come in strong, Morgan Stanley says.

Tech stocks rebounded, and Palantir delivered an exceptional earnings report.

While some on Wall Street think stocks are spring-loaded for gains after the Fed cuts interest rates, JPMorgan has a more measured view.