2025-07-31 10:40

LONDON, July 31 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. Blowout results from megacaps Microsoft and Meta catapulted U.S. stock futures up more than 1% on Thursday, while an overnight dollar surge on hawkish noises from the Federal Reserve cooled a touch as the Bank of Japan gave similar signals today. The week's blizzard of economic data and corporate earnings, trade deadlines and central bank decisions have helped Wall Street stocks and the dollar build a head of steam, with the greenback (.DXY) , opens new tab hitting two-month highs on Wednesday as Fed easing expectations retreated sharply. The dollar is now on course for its best week in almost three years. I’ll provide a rundown of the rest of today’s market news and then discuss how the current trajectory of the trade war could potentially depress goods price inflation in Europe, re-igniting calls for more monetary easing. * In the face of above-forecast U.S. GDP, inflation and payroll readings, the Fed on Wednesday signalled it was in no rush to cut rates again despite intense political pressure, knocking year-end easing bets back 10 basis points to just 35 bps. Futures now only see a 50-50 chance of a rate cut in September. June U.S. inflation updates are due later today, with July's employment report out Friday. Meanwhile, the Bank of Japan nudged up its inflation and GDP forecasts, increasing expectations for another rate rise there this year, which bolstered the yen. * Microsoft and Meta delivered big earnings beats after Wednesday's bell, causing their share prices to soar 9% and 12%, respectively, after hours, as investors welcomed news of artificial intelligence spending and cloud revenue. Microsoft is now on track to see its valuation eclipse $4 trillion. S&P 500 and Nasdaq futures both climbed more than 1% before today's open. European and Japanese stocks also advanced, while China's bourses bucked the trend on disappointing business surveys and trade tensions. * As Friday's U.S. tariff deadline nears, President Donald Trump said the U.S. will charge a 15% tariff on imports from South Korea, down from a threatened 25% and similar to deals for Japan and Europe. Canada and Mexico have yet to agree to separate deals, India faces 25% tariffs, and Brazil is still saddled with 50%. China's temporary pact with America was rolled over, but it too faces higher U.S. tariffs than Europe or Japan. But Trump also sent copper prices down almost 20% after saying 50% tariffs on imports of copper pipes and wiring would kick in on Friday, short of the sweeping restrictions expected and with several exemptions. Today's Market Minute * President Donald Trump said on Wednesday the U.S. will charge a 15% tariff on imports from South Korea, down from a threatened 25%, as part of a deal that eases tensions with a top-10 trading partner and key Asian ally. * U.S. President Donald Trump intensified his trade war with Canada a day ahead of his August 1 deadline for a tariff agreement, saying it would be "very hard" to make a deal with Canada after it gave its support to Palestinian statehood. * The Bank of Japan revised up its inflation forecasts on Thursday and offered a less gloomy outlook on the economy than three months ago, keeping alive the possibility of a resumption in interest rate hikes this year. * The European Union's lavish pledge to buy $750 billion of U.S. energy by 2028 risks exacerbating the bloc's already outsized dependence on American gas, just as it finds itself increasingly reliant on Chinese technology to power its energy transition. Read the latest from ROI energy columnist Ron Bousso. * Trump has tempered his most belligerent trade threats and begun striking deals with major partners, meaning most countries won't face the punishing tariffs announced on 'Liberation Day', but ROI columnist Jamie McGeever writes that there is one major exception: Brazil. Chart of the day Big Tech is spending more than ever on artificial intelligence - but the returns are rising too, and investors are buying in. AI played a bigger role in driving demand across internet search, digital advertising and cloud computing in the April-June quarter, powering revenue growth at technology giants Microsoft (MSFT.O) , opens new tab, Meta (META.O) , opens new tab and Alphabet (GOOGL.O) , opens new tab. The upbeat commentary also bodes well for Amazon (AMZN.O) , opens new tab, the largest U.S. cloud provider, which reports earnings after Thursday's market close. Today's events to watch * U.S. June personal consumption expenditures inflation gauge (8:30 AM EDT), weekly jobless claims (8:30 AM EDT) U.S. Q2 employment costs (8:30 AM EDT), Chicago July business survey (9:45 AM EDT); Canada May GDP (8:30 AM EDT) * U.S. corporate earnings: Apple, Amazon, Ameren, AbbVie, Biogen, Bristol Myers Squibb, Eastman Chemical, Clorox, CVS, Comcast, Resmed, Cigna, Edison, Stryker, Mastercard, Intercontinental Exchange, Coinbase, S&P Global, Southern, Howmet, Masco, First Solar, Eversource, Ingersoll Rand, PG&E, PPL, Xcel Energy, Baxter, Mettler-Toledo, Wills Towers Watson, International Paper, AMETEK, Kimco, CMS Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-07-31/

2025-07-31 10:22

Retreat from US assets slows on tariff deals, GDP Big "dollar short" peaked two weeks ago - BofA 'Rest of the world trade' follows bets against the dollar Further U.S. rebound would weigh on Europe, Asia, EM LONDON, July 31 (Reuters) - Investors' conviction that U.S. President Donald Trump's tariffs and debt spree would spark long-term pain for the dollar and U.S. stocks is crumbling, signaling pain ahead for assets across Europe and emerging markets that were boosted by this view. The dollar, which suffered its worst first-half performance since 1973 this year, is now barreling towards its first monthly gain of 2025 after the Federal Reserve resisted a rate cut, U.S. growth data was unexpectedly robust and trade war fears eased. Sign up here. That puts the so-called "rest of the world" trade, predicated on the idea of a crisis of confidence in U.S. assets but according to Barclays analysis mostly driven by investors' desire to cut exposure to a weakening dollar, at risk, investors said. On Thursday, futures trading suggested Wall Street stocks were set for a more than 1% daily gain that could end this year's burst of European equity outperformance, while the euro and Asian and emerging market assets fell sharply. "It's one of the biggest positions people have, being negative on the dollar and the U.S.," Pictet Asset Management co-head of multi-asset Shaniel Ramjee said. He was preparing to raise his dollar exposure from what he described as "practically zero", on expectations that U.S. economic trends would start outshining Europe. A broad dollar revival, he added, might bring 2025's big market trends to a halt. And as U.S. rate cut expectations faded on Thursday, some investors said the Fed may support the idea of a dollar recovery to reduce the effect of higher import costs, driven by tariffs, on consumer price inflation. COMEBACK European stocks (.STOXX) , opens new tab, which posted their best-ever quarter relative to the U.S. in the three months to March, are now clocking an 8.4% year-to-date gain against the U.S. S&P 500's (.SPX) , opens new tab 8.1 rise ahead of Thursday's market open. As recently as mid-July, conviction that the dollar would weaken was the most crowded trade among global fund managers, Bank of America research showed. That big anti-dollar bet, valued at $18 billion and by far the biggest wager in foreign exchange markets, has run into trouble after the euro , which rose to $1.1789 this month, hit 1.1401 after Wednesday's Fed meeting. The common currency, which scored the best six-month run of its 26-year lifetime in first half of the year, is now heading for its largest monthly drop against the dollar since May 2023. . On Thursday, a gauge of emerging Asian equities (.MIMS00000PUS) , opens new tab slipped more than 1% to a two-week low and MSCI's broad emerging market currency index (.MIEM00000CUS) , opens new tab headed for its first monthly loss this year. Britain's pound , meanwhile, was set for a 1.6% weekly loss, in what would be its worst performance on this metric since January's UK market rout. "We're seeing a rotation into U.S. equities, a rotation in currency markets and a rotation in (market) momentum," Edmond de Rothschild Asset Management multi-asset head Michael Nizard said. He cited Sunday's framework trade deal between Washington and Brussels as a major reason for the trend, which he did not expect to last until the end of the year, adding that he would buy the euro at around $1.14. But River Global portfolio manager Bettina Edmondston said a stronger dollar would help tame U.S. inflation, meaning a new so-called Fed put, where the central bank prop ups falling markets with monetary policy, may have opened up for the greenback. "I don't expect interest rates to come down, which intuitively makes you think the dollar should be stronger," she said. TEMPORARY? Monica Defend, head of the investment institute at Europe's largest asset manager Amundi, said she was sticking to a long-term view that the dollar was set to decline because of Trump's borrowing plans and consistent attacks on Federal Reserve independence. But she said she was also prepared to change her view "if growth in the U.S. surprises nicely on the upside," in a persistent trend from here. "The U.S. might continue to be exceptional, probably not on the macro (economic) front, but more on the equity market," she said. Nutshell Asset Management CIO Mark Ellis said he was not certain the U.S. dollar and Wall Street stocks would keep rising in tandem in August, typically one of the worst months of the year for market volatility. "Around the end of this week is a good time to take risk off and I'll be more defensive going into historical summer volatility and weakness," he said. Barclays head of European equity strategy Emmanuel Cau, in a July 30 note to clients, issued a different warning. He noted that trend-following hedge funds called CTAs, whose trades are viewed as a barometer of the dominant market mood, had closed out bets against U.S. Treasuries and cut exposure to European stocks. A more persistent dollar bounce-back, he said, would be "a key pain trade" for global investors from here. https://www.reuters.com/business/finance/global-markets-dollar-update-1-graphic-2025-07-31/

2025-07-31 10:16

MUMBAI, July 31 (Reuters) - The Indian rupee suffered its worst monthly drop in nearly three years on Thursday, weighed down by U.S. tariff concerns and persistent portfolio outflows, with traders and analysts seeing little relief for the currency in the near term. The rupee fell to an over five month low of 87.74 following U.S. President Donald Trump's threat of a 25% charge on Indian exports, alongside an unspecified penalty, starting August 1. It closed at 87.5950 down 0.2% on the day. Sign up here. The currency was down 2% for the month, its worst fall since September 2022. The Reserve Bank of India likely intervened to support the rupee on Wednesday and Thursday, traders said, but noted that the intervention was not too aggressive. The rupee could risk a fall below its all-time low of 87.95 if there are no positive developments around U.S.-India trade negotiations, traders said. Foreign outflows added to the pressure, with overseas investors net selling Indian stocks worth $2 billon in July. Economists at QuantEco said they expect the rupee to weaken towards 89.50 levels by March on a recovery in dollar sentiment and elevated global geo-economic and geopolitical uncertainties. India's equity benchmarks, the Nifty 50 (.NSEI) , opens new tab and BSESN (.BSESN) , opens new tab, fell as much as 0.9% in early trading, but pared losses to close about 0.3% lower. Meanwhile, Asian currencies fell on Thursday, bogged down by weak Chinese economic data and the approaching August 1 U.S. tariff deadline. The dollar index was flat at 99.8 after rising nearly 1% in the previous session. Later in the day, the focus will turn to U.S. personal consumption expenditure (PCE) inflation data to gauge the path of benchmark policy rates in the world's largest economy. https://www.reuters.com/world/india/rupee-suffers-worst-monthly-drop-since-2022-tariff-blow-portfolio-outflows-2025-07-31/

2025-07-31 09:38

Fed keeps rates steady, traders now doubtful about September cut BOJ less gloomy on economy, supporting rate hike expectations Trade uncertainty stops Bank of Canada giving detailed forecasts LONDON, July 31 (Reuters) - The pace of global rate cuts is slowing as the European Central Bank nears the end of its easing cycle, the U.S. Federal Reserve stays cautious about tariff-driven inflation and investors watch to see whether Britain speeds up from here. The Fed struck a hawkish tone on Wednesday alongside holding rates steady, an approach that lifted the dollar and assuaged fears that President Donald Trump's intense pressure on chair Jerome Powell has eroded central bank independence. Sign up here. Here's where 10 big central banks stand: 1/ SWITZERLAND Bets that the Swiss National Bank will use negative interest rates to tackle the seemingly unstoppable rise of the safe haven franc have faded after it kept benchmark borrowing costs on hold at 0% in June. Traders regard another pause in September as near certain and speculate that the SNB has started intervening to weaken the franc. 2/ CANADA The Bank of Canada held its key policy rate at 2.75% for the third straight meeting on Wednesday, citing lower risks of a severe and escalating global trade war. But it declined to give detailed economic forecasts, citing uncertainty around U.S. trade policy, and said that if the economy weakened further it could cut rates again. The BoC has eased rates by 225 basis points since June 2024, and markets see a reasonable chance of one more cut by year end. 3/ SWEDEN Ahead of Sweden's disappointing second quarter GDP data on Tuesday, the Riksbank cut its key rate to 2% last month and said policy could be eased again this year if inflation remains tame and growth remains weak. 4/ NEW ZEALAND The Reserve Bank of New Zealand, which has cut rates by 225 bps already this cycle, held borrowing costs steady earlier this month but said it expected to loosen monetary policy if price pressures continued to ease as expected. 5/ EURO ZONE The European Central Bank held steady last week after cutting eight times in a year, and many analysts expect it is finished with easing this cycle. The EU-U.S. trade deal took worst-case tariff scenarios off the table, and, alongside the ECB's relatively upbeat assessment of the economic outlook, allayed fears that inflation would fall significantly below its 2% target. The ECB's main policy rate is currently at 2%, down from 4% a year ago, though markets see some chance of one more cut. 6/ UNITED STATES The Federal Reserve stayed on pause on Wednesday and traders responded to Chair Jerome Powell's comments by cutting bets that borrowing costs would begin to fall in September, putting $18 billion worth of bets on dollar weakness in danger. That could stoke the ire of President Donald Trump who has demanded immediate and steep rate relief. Powell said the Fed is focused on controlling inflation - not on government borrowing or home mortgage costs that Trump wants lowered. He added that the risk of rising price pressures from the administration's trade and other policies remains too high for the Fed to begin loosening its "modestly restrictive" grip on the economy until more information is collected. The Fed has been on hold all this year, and markets see less than a 50% chance of a rate cut in September. 7/ BRITAIN The Bank of England meets on Aug 7. Markets expect a 25-bps rate cut even after data this month showed a surprise jump in inflation and a less-dramatic-than-feared cooling in the labour market. Sticky inflation means the BoE has been more cautious than most with easing. Markets price two, 25-bp rate cuts by year-end - including an August move. 8/ AUSTRALIA The Reserve Bank of Australia is cautious too and surprised markets earlier this month by holding rates steady at 3.85%, as it awaited confirmation that inflation is continuing to slow. Wednesday data showing Australian consumer prices grew at the slowest pace in over four years in the June quarter should help, and markets are near certain the RBA will cut its 3.85% cash rate by 25 bps next month, and continue easing to 3.10% by year end. 9/ NORWAY Norway's central bank cut rates by 25 bps to 4.25% last month, its first reduction since 2020 but with only one more fully priced for 2025. The Norges Bank has been the most cautious among developed market central banks, and data this month showing core inflation at 3.1% reinforced this stance. 10/ JAPAN The Bank of Japan, the sole major central bank in hiking mode, kept interest rates steady at 0.5% on Thursday, but revised up its inflation forecasts and offered a less gloomy outlook on the economy than three months ago. Those changes maintained confidence about the BOJ resuming hikes this year. https://www.reuters.com/business/finance/global-markets-cenbank-pix-2025-07-31/

2025-07-31 08:58

July 31 (Reuters) - Qualcomm (QCOM.O) , opens new tab shares fell nearly 5% in early trading on Thursday as the looming loss of Apple (AAPL.O) , opens new tab as its biggest modem customer and higher dependency on premium smartphone chips outweighed its upbeat quarterly forecast. Shares of the mobile chip designer were last down at $152.55. Sign up here. The San Diego-based chip supplier warned investors that Apple's move to depend on in-house modems, starting with the February launch of the iPhone 16e would hit future chip revenue. Qualcomm has intensified its focus on sectors such as data centers and personal computers. Adding to the pressure, U.S. President Donald Trump's renewed tariff threats on semiconductors have emerged as a risk, potentially disrupting supply chains and hurting Qualcomm's handset revenue, analysts said. While smartphones and semiconductor chips have so far been exempt from these levies, Trump recently warned he would "soon announce tariffs on semiconductors," raising concerns of sector-specific duties. CFO Akash Palkhiwala told Reuters that the company has not seen early chip orders yet, suggesting customers aren't rushing to beat possible tariffs. "Tariffs could trim mid-single digits off handset revenue, but Chinese OEMs (original equipment manufacturers) still view (Qualcomm's mobile phone chip) Snapdragon as essential for global 5G and AI-on-device marketing," said Michael Ashley Schulman, CIO at Running Point Capital. Qualcomm, the world's largest supplier of modem chips and seen as a bellwether for smartphones, said chip sales to non-Apple customers have risen more than 15% this fiscal year, driven by premium Android launches. "We see durable share at Samsung and an extended collaboration with Xiaomi as key support in the handset segment as Apple chipset revenue comes out of the model," TD Cowen analysts said. Qualcomm is also expanding in augmented reality. CEO Cristiano Amon said the company now supports 19 augmented reality designs including META's (META.O) , opens new tab Ray-Ban smart glasses and expects that number to grow. Qualcomm forecast fourth-quarter earnings slightly above estimates, with Citi analysts warning that Apple's potential exit continues to weigh on core growth. The company's 12-month forward price-to-earnings ratio is 13.36, trailing Nvidia's (NVDA.O) , opens new tab 34.91, Intel's (INTC.O) , opens new tab 47.14 and Advanced Micro Devices (AMD.O) , opens new tab 35.33, according to data compiled by LSEG. https://www.reuters.com/business/qualcomm-shares-slide-apple-modem-shift-tariffs-raise-growth-concerns-2025-07-31/

2025-07-31 08:45

Microsoft shares jump 8.5% premarket after results Shares rebound 50% from April 2025 lows AI advancements boost stock value post-ChatGPT launch July 31 (Reuters) - Microsoft (MSFT.O) , opens new tab is set to soar past $4 trillion in market valuation for the first time on Thursday, as a blockbuster earnings report helps the tech behemoth become the second company after Nvidia to surpass the milestone. The software company forecast a record $30 billion in capital spending for the current fiscal first quarter and reported booming sales in its Azure cloud computing business on Wednesday. Sign up here. Shares of Microsoft were up 8.5% at $557.03 in early premarket trading, valuing it at $4.14 trillion. Redmond, Washington-headquartered Microsoft first cracked the $1 trillion mark in April 2019. Its move to $3 trillion was more measured than other tech giants, Nvidia (NVDA.O) , opens new tab and Apple (AAPL.O) , opens new tab, with AI bellwether Nvidia tripling its value in just about a year and clinching the $4 trillion milestone before any other company on July 9. Apple was last valued at $3.12 trillion. Lately, breakthroughs in trade talks between the U.S. and its trading partners ahead of President Donald Trump's August 1 tariff deadline have buoyed stocks, propelling the S&P 500 and the Nasdaq to record highs. Microsoft, the second largest U.S. company, has rebounded nearly 50% from its April 2025 lows, when global markets were rattled by Trump's tariff offensive. Microsoft's multibillion-dollar bet on OpenAI is proving to be a game-changer, powering its Office Suite and Azure offerings with cutting-edge AI and fueling the stock to more than double its value since ChatGPT's late-2022 debut. Armed with exclusive access to OpenAI's models, Microsoft has raced to the front of the generative AI pack - supercharging its Azure cloud business, now the company's top revenue driver, and solidifying its dominance in the tech landscape, compared to Google's cloud and Amazon's web services. Wall Street's surging confidence in the company comes on the heels of back-to-back record revenues for the tech giant since September 2022. The stock's rally had also received an extra boost as the tech giant trimmed its workforce and doubled down on AI investments — determined to cement its lead as businesses everywhere race to harness the technology. While sweeping U.S. tariffs had investors bracing for tighter business spending, Microsoft's strong earnings have shown that the company's books are yet to take a hit from the levies. https://www.reuters.com/business/retail-consumer/microsoft-poised-4-trillion-valuation-after-solid-results-2025-07-31/