US futures saw an upswing after a week of market turbulence, spurred by robust earnings reports from Amazon.com Inc. and Intel Corp. The price of crude oil also saw an increase following US strikes on Syria-based facilities linked to Iran.
Nasdaq futures rebounded by 0.8% after a recent downturn, while the S&P 500 hovered on the edge of a potential “correction,” down nearly 10% from its July peak.
Over in Europe, the Stoxx 600 experienced a slight dip due to underwhelming earnings. NatWest Group Plc saw a sharp decline after revising margin guidance amid heightened competition for deposits due to increased interest rates. Universal Music Group NV, the label behind Taylor Swift, faced a decline after falling short of some estimates. However, energy giants saw gains as Brent crude approached $90 a barrel.
Earnings reports have yielded a mixed bag of results, with companies facing harsher repercussions for falling short. In the US, 78% of companies exceeded estimates, compared to 57% in Europe. Nevertheless, more companies are indicating lower consumer demand and a challenging economic climate.
Attention now shifts to various reports, including the Federal Reserve’s pivotal measure of underlying price pressures, to gauge expectations for the central bank’s forthcoming decisions.
Analyst Hebe Chen noted that sturdy US growth and strong tech company earnings bring welcome relief to apprehensive investors. The spotlight now turns to the impending Federal Open Market Committee (FOMC) meeting, expected to establish the trajectory for the remainder of the year.
In Asia, Hong Kong and Japan led the surge in stocks, with Australian and South Korean markets also displaying positive signals. Mainland Chinese shares inched higher, albeit with slightly softer growth in profits for industrial companies.
Treasury yields edged up, while the dollar remained steady. Swap contracts indicate approximately a one in three chance of another Fed interest rate hike within the current tightening cycle.
The yen maintained stability after an unforeseen acceleration in Tokyo inflation, signifying heightened consumer cost pressures in Japan. Finance Minister Shunichi Suzuki reiterated officials’ vigilant stance on currency movements.
Geopolitical shifts in the Middle East are being closely monitored, with Israel’s military reporting the elimination of Hamas’s deputy head of intelligence, allegedly responsible for recent attacks. Additionally, the army executed a limited ground operation in northern Gaza, while tensions between Iran and the US escalated.
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