Stocks Steady as Investors Eye Tech Earnings and Fed Uncertainty
Global markets remained steady on Thursday as investors awaited key earnings reports from major technology firms such as TSMC and Netflix, while political uncertainty surrounding U.S. Federal Reserve Chair Jerome Powell weighed on sentiment. Despite expectations for TSMC to post record second-quarter profits, concerns over U.S. tariffs and a strong Taiwan dollar clouded the outlook. Netflix, having significantly outperformed the S&P 500 this year, faced high investor expectations to deliver strong results.
Asian markets showed limited movement, with the MSCI Asia-Pacific index excluding Japan edging up just 0.07%, and Japan’s Nikkei rising by 0.2%. Canadian firm Alimentation Couche-Tard’s withdrawal from a $47 billion takeover bid for Japan’s Seven & i Holdings dampened sentiment, leading to an 8% drop in the latter’s shares. Meanwhile, European futures were slightly more optimistic, while U.S. futures remained subdued, reflecting investor caution.
Political drama surrounding Fed leadership added further volatility. Initial reports suggested that Donald Trump, currently a U.S. presidential candidate, might fire Jerome Powell, rattling markets. Although Trump denied any immediate plans, he reiterated criticism of Powell’s interest rate stance, contributing to speculation about the Fed’s future independence and policy direction. Analysts expect intermittent market turbulence until Powell’s term ends next year.
Currency markets reflected the broader uncertainty, with the U.S. dollar weakening on concerns about central bank stability. The euro and pound made gains before easing slightly, and the U.S. dollar index recovered marginally after overnight losses. Treasury yields also fluctuated in response to the political uncertainty, as markets recalibrated expectations for interest rate cuts if Powell were to be removed.
In commodities, oil prices edged higher, supported by modest gains in both Brent and U.S. crude futures. Meanwhile, spot gold dipped slightly, and the Australian dollar weakened after national employment data showed a rise in the jobless rate to a three-and-a-half-year high. All eyes now turn to the tech earnings later in the day, which may set the tone for global markets moving forward.
Source: Reuters