A measure of U.S. services sector activity slumped to a four-year low in June amid a sharp drop in orders, potentially hinting at a loss of momentum in the economy at the end of the second quarter.

New orders for U.S.-manufactured goods unexpectedly fell in May, while business spending on equipment appeared weaker than initially thought, government data showed on Wednesday.

First-time applications for U.S. unemployment benefits increased last week, while the number of people on jobless rolls rose further to a 2-1/2 year high towards the end of June, consistent with a gradual cooling in the labor market.

The dollar remained on the back foot on Wednesday after dovish comments from Federal Reserve Chair Jerome Powell sent U.S. bond yields lower, overshadowing a strong domestic jobs report.

Asian stocks rose on Wednesday as comments from Federal Reserve Chair Jerome Powell reinforced expectations that U.S. rate cuts were not far off, while the yen struggled at levels last seen in 1986, keeping traders wary of Japanese intervention.

Oil prices rose on Wednesday after industry data showed a bigger-than-expected draw in U.S. crude stockpiles, while the market kept tabs on flaring tensions in the Middle East.