Global Stock Markets Waver as Tech Shares Take a Hit and Investors Brace for Interest Rate Decisions
Mixed Day for European and Asian Markets
Global stock markets experienced fluctuations on Friday following a day of heavy losses in major US tech firms. Investors are now preparing for a week filled with interest rate decisions.
Wall Street closed the week on a quiet note. The Dow Jones Industrial Average managed to squeeze out a small gain, marking the 10th consecutive session of growth for the first time since 2017. However, the Nasdaq continued its decline, although with a smaller loss compared to Thursday’s major setback.
Briefing.com noted that market participants seemed hesitant to buy or sell as they looked ahead to the upcoming earnings reports from key companies such as Google parent Alphabet, Microsoft, and Meta Platforms, the owner of Facebook.
Earnings Reports Influence Market Sentiment
Art Hogan of B. Riley Financial pointed out that the market response to earnings reports has been a reflection of what was already priced into individual stocks. For example, stocks like Tesla and Netflix, which were highly valued, stumbled after their earnings fell short. On the other hand, Johnson & Johnson experienced a surge due to a much lower valuation following its results.
Aside from earnings reports, the market is also awaiting the Federal Reserve policy meeting scheduled for next week. While an interest rate hike is widely anticipated, Hogan mentioned that the market could be disrupted if the US central bank takes a more hawkish approach than expected. Investors generally do not expect another rate increase in September.
Central Banks’ Meetings and Japanese Inflation Impact Currency Markets
Next week will also see both the European Central Bank and the Bank of Japan holding their monetary policy meetings. The yen briefly rallied against the dollar after data revealed an increase in Japanese inflation in June. Some view this as added pressure on the Bank of Japan to tighten its policy. However, the yen later slid more than one percent as observers suggested that the figures were unlikely to sway monetary policymakers from their ultra-loose stance. It is widely expected that the Bank of Japan will maintain its current stance at the upcoming meeting.
Key Figures
- New York – Dow: UP less than 0.1 percent at 35,227.69
- New York – S&P 500: less than 0.1 percent at 4,536.34
- New York – Nasdaq: DOWN 0.2 percent at 14,032.81
- London – FTSE 100: UP 0.2 percent at 7,663.73
- Frankfurt – DAX: DOWN 0.2 percent at 16,177.22
- Paris – CAC 40: UP 0.7 percent at 7,432.77
- EURO STOXX 50: UP 0.4 percent at 4,391.41
- Tokyo – Nikkei 225: DOWN 0.6 percent at 32,304.25
- Hong Kong – Hang Seng Index: UP 0.8 percent at 19,075.26
- Shanghai – Composite: DOWN 0.1 percent at 3,167.75
Euro/dollar: UP at $1.1131 from $1.1130 on Thursday
Pound/dollar: DOWN at $1.2852 from $1.2868
Euro/pound: UP at 86.56 pence from 86.50 pence
Dollar/yen: UP at 141.77 yen from 140.07 yen
Brent North Sea crude: UP 1.8 percent at $81.07 per barrel
West Texas Intermediate: UP 1.9 percent at $77.07 per barrel
