Asian Pacific markets end lower

European markets open lower as pharma sector faces pressure

European stock indices were sharply lower across the board on Friday. Yesterday, the UK’s FTSE 100 hit a fresh all-time intra-day high of 9,190. But it subsequently dropped back, falling below 9,100 in early trade this morning. Even today’s weakness in sterling (which usually helps to lift UK multinationals) failed to offer much support. Instead, the FTSE followed the rest of Europe into negative territory as US stock index futures compounded losses made yesterday. 

Source: TN Trader

Across the continent, the pharmaceutical sector came under pressure following news that President Trump had sent letters to 17 drug companies, escalating regulatory scrutiny. Shares of Novo Nordisk fell around 4% in Copenhagen. AstraZeneca lost 3.9%, while other major players like GSK, Sanofi, and Novartis were also lower. The sector-wide sell-off dragged on broader market sentiment.

Elsewhere, earnings are in focus. Companies such as AXA, Daimler Truck, Melrose Industries, Saint-Gobain, Euronext, IAG, Pearson, and Engie are set to report results during the day. Bayer raised its 2025 sales forecast to a range of €46–48 billion and announced a €1.2 billion provision for ongoing Roundup litigation in the US. The company reports quarterly earnings on August 6.

Wall Street extends losses

US stock index futures were sharply lower in early trade on Friday, adding to losses made in yesterday’s session. All the US majors closed in the red on Thursday, despite strong results from Microsoft and Meta Platforms, together with news that both ‘Magnificent Seven’ constituents were ramping up their spending on AI development.

The NASDAQ had a minimal loss on the day, while the S&P 500 ended down 0.4%. Both indices had hit fresh all-time intra-day highs earlier in the session. Meanwhile, the Dow and Russell 2000 fell 0.7% and 0.9% respectively. The tech-fuelled rally fizzled as renewed tariff concerns ahead of President Trump’s overnight deadline weighed on sentiment.

Source: TN Trader

After last night’s close, Apple delivered solid quarterly results, reporting strong iPhone sales that saw its stock post a 2% gain. However, this positive tone was short-lived. Amazon’s earnings fell flat with investors. There was particular concern over disappointing results from its cloud division, along with some cautious forward guidance. Amazon tumbled over 8% following the news.

Traders now turn their attention to July’s Non-Farm Payrolls, which will be released later today. The consensus expectation is for a payroll print of around 110,000 jobs, down from 147,000 previously. Analysts also expect the Unemployment Rate to tick up to 4.2% from 4.1%. Today’s major earnings reports come from oil giants Exxon Mobil and Chevron.

Adding to market tension is the passing of President Trump’s tariff deadline, which will bring increased duties on a wide range of US imports. The latest measures include 35% tariffs on Canadian goods, 25% on India, 15% on both Japan and the European Union, and nearly 40% on Swiss products.

Cambodia and Malaysia face rates of 19%, while Taiwan is now subject to a 20% tariff. These additional levies will officially start in a week’s time. Mexico has been granted a 90-day extension amid ongoing negotiations.

Just hours before the deadline, President Trump confirmed that goods transhipped to avoid existing duties would also face a punitive 40% levy. The sweeping changes to trade policy have overshadowed otherwise strong earnings from Microsoft and Meta Platforms, leaving investors uncertain about the near-term direction for equities.

Dollar holds gains

The US dollar was firmer across the board on Friday and continued to build on recent gains. The Dollar Index hit a two-month high overnight. It added close to 4% in July, having started the month trading at its lowest level since February 2021. The dollar found support from trade policy headlines, as investors prepared for today’s payroll update.

Source: TN Trader

Oil drifts lower

Crude oil drifted lower in early trade on Friday. Front-month WTI pulled back further from the $70.00 per barrel high hit on Wednesday. Oil found some support from ongoing geopolitical concerns. In addition, the latest round of US tariffs has raised fears of supply disruptions and retaliatory trade moves.

Ongoing tensions with Russia, particularly President Trump’s threat of secondary sanctions on countries purchasing Russian oil, have kept energy markets tight. Demand indicators have shown some softening in recent weeks, but supply constraints and geopolitical uncertainty continue to support prices.

But looking at the chart, it appears that the recent breakout of the trading channel has lost momentum, and prices now look as if they could fall back into the old range. The daily MACD has also started to drift lower, suggesting that upside momentum is fading.

Source: TN Trader

Gold stabilises

On Wednesday, gold fell sharply and closed below $3,300 for the first time in a month. Prices stabilised a touch yesterday, as gold made back some of Wednesday's losses. But there hasn’t been enough upside momentum to push gold back above $3,300 so far.

Despite this, gold continues to trade in a range, while the daily MACD trundles along the neutral line, with a slight negative bias. Short-term direction is far from clear, and many traders may choose to take their cue from the US dollar, which put in a strong performance in July.

That could put some downside pressure on gold, which could take it down towards the lower end of its trading range. But there’s currently little evidence to suggest that prices have topped, although gold is proving to be a frustrating trade currently.

Source: TN Trader

Meanwhile, silver continues to correct downwards, coming within sight of $36 per ounce. This is helping to reset the daily MACD, which needs to be done for silver to build up sufficient momentum for another push higher. Traders will be watching to see if $36 holds as support, or if prices have further to fall over the summer.

Volatility inches higher

Market volatility ticked higher on Friday. The VIX has risen close to 12% since the beginning of this week, reflecting growing investor unease as earnings, tariffs and key macro data converge.

Despite strong results from Apple and other tech names, headline risk has reemerged. With updated US tariffs taking effect and the July jobs report due later today, traders are likely to remain cautious, especially heading into the weekend.

Market outlook

Markets are facing multiple crosscurrents on the first trading day of August. While earnings from Apple, Microsoft, and Meta have exceeded expectations, investors got a shock as Amazon disappointed. The broader indices remain under pressure as investors weigh the impact of new tariffs and an uncertain macro backdrop.

President Trump’s sweeping update to US tariff policy has shifted focus away from corporate fundamentals toward geopolitical risk. The duties - ranging from 10% to over 40% - target both strategic rivals and key allies, raising fears of retaliatory measures and trade-driven slowdowns. Canada, India, the EU, and others are now bracing for impact, with Mexico being granted a temporary reprieve.

Meanwhile, the Federal Reserve’s decision to hold rates at 4.25%–4.5% in a 9-2 vote shows internal division, particularly as President Trump continues to push for rate cuts. With the Fed on pause until September at the earliest, attention turns to economic data, and today’s Non-Farm Payroll report will be closely watched for clues over the US labour market.