London (AFP) – Global stock markets diverged Tuesday as the focus turned to tech company earnings following a strong start to a week dominated by the spellbinding US presidential race.
Wall Street opened flat as traders were also awaiting key US inflation data due Friday.
Europe’s main stock markets were mixed in afternoon trading after Asia’s major indices closed lower.
The dollar climbed against its main rivals, while oil prices slid.
Joe Biden’s decision to drop out of the presidential election race and endorse Vice President Kamala Harris had little major impact on sentiment, analysts said.
“Politics could be less of a driver for markets for the rest of the summer now that the Democrats are back in the race,” noted Kathleen Brooks, research director at XTB.
Harris and Trump “are known quantities, so whoever wins the race for the White House, the market, in some ways, knows what to expect”, she said.
“Harris may continue the policies of Joe Biden, and everyone expects…Trump to cut taxes and to implement trade barriers” should he become president, Brooks added.
Attention turned to corporate earnings, with Google parent Alphabet and electric carmaker Tesla due to report results after Wall Street closes.
The are part of the “Magnificent Seven” tech firms that have driven the rally in markets this year, helping push all three main New York indices to multiple record highs, thanks also to expectations the Federal Reserve will cut borrowing costs.
“This month, the Magnificent Seven have experienced a sharp decline in total return,” said market analyst Fawad Razaqzada at City Index and FOREX.com.
“Therefore, tonight’s results from Alphabet and Tesla will significantly influence whether the rally resumes,” he added.
Shares in both firms rose at the start of trading on Tuesday.
Razaqzada said the outlook for the earnings season is positive with the Magnificent Seven expected to drive overall gains in the market.
Swedish music streaming giant Spotify reported a 12 percent increase in subscribers to 246 million in the second quarter, beating estimates, along with a 266-million-euro operating profit.
Its shares bounded 14 percent higher as trading got underway in New York.
The US central bank’s monetary policy is back in focus ahead of Friday’s report on personal consumption expenditure, the Fed’s favoured gauge of inflation.
The figure has come down steadily in recent months, giving central bank officials room to begin cutting rates, with bets on a September move increasing.
– Key figures around 1330 GMT –
New York – Dow: FLAT at 40,422.23 points
New York – S&P 500: FLAT at 5,565.26
New York – Nasdaq Composite: DOWN 0.1 percent 17,987.03
London – FTSE 100: DOWN 0.4 percent at 8,165.70
Paris – CAC 40: DOWN 0.3 percent at 7,597.07
Frankfurt – DAX: UP 0.7 percent at 18,543.80
EURO STOXX 50: UP 0.4 percent at 4,915.77
Tokyo – Nikkei 225: FLAT at 39,594.39 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 17,469.36 (close)
Shanghai – Composite: DOWN 1.7 percent at 2,915.37 (close)
Euro/dollar: DOWN at $1.0855 from $1.0890 on Monday
Pound/dollar: DOWN at $1.2911 from $1.2929
Dollar/yen: UP at 156.14 yen from 157.08 yen
Euro/pound: DOWN at 84.04 pence at 84.20 pence
West Texas Intermediate: DOWN 0.8 percent at $77.78 per barrel
Brent North Sea Crude: DOWN 0.7 percent at $81.82 per barrel
burs-rl/lth
© 2024 AFP
