Global Markets Mixed Ahead of Fed Rate Decision

By Dow Jones Newswires Staff

U.S. stock futures pointed to a slightly higher open Tuesday, as earnings continue to roll in and ahead of Wednesday's Federal Reserve rate decision. There was a mixed picture across global stock markets, with most Asian markets closing lower and modest gains early in Europe. Investors soured on the euro as the dollar made broad gains.

• U.S. futures for the S&P 500 and Dow Jones Industrial Average rose 0.1% and Nasdaq futures gained 0.3%. Earnings will come today from Boeing, Spotify, United Health, Procter & Gamble, Visa and PayPal, among others.
• In Europe, the Stoxx Europe 600 gained 0.4% in morning trading. Koninklijke Philips jumped 12% after it raised its guidance, and Ray-Ban maker EssilorLuxottica climbed 5.3%. Stellantis dropped nearly 3.0% even after it reinstated its guidance. The carmaker said it expects to report a total tariff impact of around 1.5 billion euros ($1.74 billion) this year, of which 300 million euros was incurred in the first half. France's CAC 40 and Germany's DAX both gained 0.6%. The U.K.'s FTSE 100 added 0.1%.
• At the close in Asia, Japan's Nikkei 225 index fell 0.8%, Hong Kong's Hang Seng declined 0.5%, whereas China's benchmark Shanghai Composite gained 0.3%. South Korea's Kospi ended up 0.7% for a fifth higher close in succession.
• The dollar rose to a one-month high against a basket of currencies, boosted by optimism over U.S. trade deals, and as the focus for foreign-exchange market participants has shifted away from trade uncertainty to the resilience of the U.S. economy, MUFG Bank's Derek Halpenny said. Strong U.S. earnings have also helped. The DXY dollar index hit a one-month high early in European trade.
• Meanwhile, the euro dropped on concerns about tariffs harming the eurozone economy. Sterling rose against the euro even as it fell vs the dollar, as investors trimmed previous bets on the euro strengthening. The framework U.S.-European Union trade deal includes a 15% tariff, compared with the 10% tariff on the U.K. as part of the U.K.-U.S. trade agreement.
• In fixed-income, U.S. Treasury yields edged lower as markets await the Federal Reserve's policy decision on Wednesday, where it is widely expected to hold despite pressure from the Trump administration for early cuts. The two-year yield was last down 0.6 basis point to 3.915%; while the 10- and 30-year yields fell 1.6 basis points to 4.402% and 4.948%, respectively, according to Tradeweb. Markets price in 44 basis points of rate cuts for this year, according to LSEG.
• Eurozone bond yields have been falling ahead of Wednesday's flash estimate of national and eurozone GDP data for the second quarter. On Monday, the 10-year German Bund yield closed at 2.688%, down 3.5 basis points, according to Tradeweb.
• In commodities, gold futures barely moved, up 0.1% at $3,312.30 a troy ounce. There was also little movement in crude oil benchmarks.

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