Asian Pacific markets mixed

Positive start for European indices

European stock indices had a positive start to Thursday’s trade following a mixed close yesterday. Sentiment improved from Wednesday’s session, which saw some divergence across sectors as the second-quarter earnings season ramped up.

European indices were also responding to moves across Wall Street. US stock indices fell sharply after the Federal Reserve Chair Jerome Powell’s press conference. But they then recovered into the close and were sharply higher this morning following blow-out second quarter results from Meta Platforms and Microsoft, released after last night's close.

Source: TN Trader

Among the highlights this morning, energy giant Shell reported better-than-expected earnings. Despite a general decline in oil and gas prices over the quarter, Shell managed to outperform thanks to operational efficiency and trading performance. In addition to the earnings beat, Shell confirmed plans for a share buyback, a move welcomed by investors looking for continued capital returns amid volatile energy markets.

Also reporting on Thursday was consumer goods heavyweight Unilever. The company posted a 3.8% rise in underlying sales for the second quarter, edging past the 3.6% forecast from a company-compiled poll. More than half the growth was attributed to price increases, particularly in personal care, beauty, and well-being segments. 

Brands such as Hellmann’s mayonnaise and Dove soap continued to see robust demand, despite inflationary pressure on consumers.

UK-based Standard Chartered also reported strong quarterly profits and announced a share buyback. And Rolls-Royce jumped 9%, taking the stock to yet another all-time high, following the release of its half-year results.

US stock index futures rally on earnings

US stock index futures were sharply higher in early trade on Thursday. The move followed robust after-hours earnings from tech giants Microsoft and Meta Platforms, which were up 9% and 11% respectively this morning.

The US majors staged a complete U-turn last night. They sold off sharply soon after the Federal Reserve confirmed that they were leaving rates unchanged and as Fed Chair Jerome Powell held his press conference.

Two FOMC members dissented, calling for an immediate cut of 25 basis points. But the accompanying statement, along with comments from Mr Powell, suggested a more hawkish outlook from the central bank. This saw the probabilities of a September rate cut fall significantly as FOMC members took account of recent economic data releases, which indicated resilience.

At the same time, uncertainty over the Trump administration’s tariffs and trade policy continued to give the Federal Reserve a good excuse to ‘wait and see’.

Source: TN Trader

Microsoft reported that revenue from its Azure cloud computing business had surpassed $75 billion annually - a milestone that underscored the tech giant’s continued leadership in the cloud space.

Meta Platforms also delivered a strong quarter. The company posted better-than-expected numbers and offered an upbeat sales outlook for Q3. The results reinforced investor confidence in the “Magnificent Seven”, the market-leading tech giants that have driven much of the S&P 500’s performance in recent months.

Attention now shifts to a fresh batch of key earnings due later today. Apple, Amazon, Coinbase and MicroStrategy are all set to report. Their results could either add to the current momentum or introduce fresh volatility, particularly if any guidance disappoints.

PCE and jobless claims take centre stage

Beyond earnings, investors are closely watching for Thursday’s key economic data releases. Core Personal Consumption Expenditures (PCE) is the Federal Reserve’s preferred inflation gauge. It is expected to come in at 2.7% year-on-year, unchanged from the prior reading.  

Weekly Unemployment Claims are also released today. The labour market remains a key focus for policymakers, and any significant changes can influence expectations for future rate moves.

Together, the inflation and employment data form a critical input into the Fed’s policy outlook for the second half of the year, particularly with markets now dialling back expectations for a September rate cut.

Dollar index pushes higher after data bounce

The US dollar extended its recovery on Wednesday. The Dollar Index surged above 99.00 to hit a two-month high. The bounce followed the release of better-than-expected Advance GDP, which showed a strong recovery in the second quarter. The ADP payroll report was also better than forecast, while the FOMC’s hawkish tilt also supported dollar strength.

Oil pulls back from five-week high

Crude oil prices drifted lower in early Thursday trade. Front-month WTI broke above $70 per barrel yesterday, hitting its highest level in five weeks. Earlier this week, crude broke out of its recent trading range, setting the scene for higher prices. But oil has had many false upside breakouts, so the bulls will be on their guard.

Much depends on how prices behave on any pullback. If oil can find support at the upper trendline, then that could set the stage for a more sustained upside run.

Source: TN Trader

Bullish sentiment was supported by strong quarterly earnings from Shell, which beat profit expectations and announced a share buyback. US oil giants Exxon Mobil and Chevron report tomorrow.

Metals slide

US High Grade copper slumped over 20% yesterday after President Trump reversed his threat to impose swingeing tariffs on the key industrial metal. Gold and silver also came under heavy selling pressure as traders lightened up their exposure as the US dollar rallied.

Gold has bounced back this morning as bulls used the pullback to add to long positions. Despite the sharp moves, gold continues to trade within its established range, with support around $3,250 and resistance at $3,450.

Source: TN Trader

Silver came under heavy selling pressure again this morning. Prices broke below $37 per ounce, and silver is now entering a band of support which stretches down to $36.

Source: TN Trader

VIX steady

The CBOE Volatility Index (VIX) perked up a touch yesterday as US stock indices staged a rare but modest sell-off. But it was firmer this morning as the US majors rallied following strong earnings reports from Meta Platforms and Microsoft. Overall, volatility has remained contained despite a busy news cycle - including fresh tariffs, rate decisions, and high-profile earnings.

Investor positioning appears relatively balanced, with many traders waiting for clarity from today’s inflation and labour market data before making larger directional bets. However, with Apple and Amazon still set to report after the bell, there remains potential for volatility to re-emerge should any results deviate significantly from expectations.

Market outlook

Markets head into the second half of the week balancing renewed earnings optimism against rising geopolitical and macroeconomic uncertainty. The decision by both the Federal Reserve and the Bank of Japan to keep rates unchanged offered some initial stability. However, with the Fed now expected to hold policy steady through September, the bar for a rate cut continues to rise.

Strong earnings from Microsoft and Meta boosted US stock index futures, reinforcing the bullish narrative around mega-cap tech. Apple and Amazon’s reports later today could either solidify this rally or introduce fresh risks if guidance underwhelms.

Tariff developments have returned to the spotlight. India’s exposure to a new 25% levy added another layer of uncertainty. The next key test comes from today’s PCE inflation report and weekly jobless claims.