Tesla Delivery Report and Powell's Comments Lift Markets

Asian and European markets were optimistic after Fed Chair Jerome Powell's comments suggested potential rate cuts, putting pressure on the dollar and lowering Treasury yields. The euro remained steady at $1.074475, with futures indicating a rebound for the STOXX 600 index. Tesla reported a smaller-than-expected 5% drop in Q2 vehicle deliveries, boosted by price cuts and incentives.

Equities

The FTSE 100 fell 0.6% to 8,121.2, hitting a more than two-month low as investors remained cautious ahead of parliamentary elections. Among UK stocks, insurer Beazley dropped 5.2%, leading the declines for nonlife insurers, which fell 2.5% overall. GSK slipped 1.5% after a Delaware judge allowed over 70,000 lawsuits to proceed, alleging that its heartburn drug Zantac caused cancer. Sainsbury's fell 2.9% after maintaining its annual financial guidance despite a 3% rise in first-quarter underlying sales. BP gained 1.3% as oil prices held near two-month highs, driven by expectations of rising fuel demand and potential US interest rate cuts.

On Wall Street, the main stock indexes closed higher, with the Dow Jones Industrial Average rising 0.41% to 39,331.85, the S&P 500 gaining 0.62% to 5,509.01, and the Nasdaq Composite climbing 0.84% to 18,028.76. Tesla surged to its highest level since January following a smaller-than-expected 5% drop in Q2 vehicle deliveries. Megacap stocks also performed well, with Apple up 1.6% and Amazon.com and Alphabet also posting gains as US Treasury yields fell. Nvidia, however, dropped 1.3% despite being up more than 147% year-to-date.

Paramount Global saw a significant rise, climbing 5.7% after news that Barry Diller's IAC was exploring a bid to take control of the media giant.

Forex & Commodities

The yen weakened to a 38-year low against the dollar, trading at 161.875 per dollar, and hit a record low against the euro at 173.80. Japanese authorities have largely refrained from intervening, with new finance ministry currency chief Atsushi Mimura yet to take significant action. The dollar index strengthened 0.1% to 105.78, recovering from the previous session's decline. The euro edged down 0.07% to $1.0739, buoyed by high local inflation suggesting the European Central Bank will delay rate cuts. Sterling held steady at $1.2680 ahead of the UK election.

Gold prices firmed, with spot gold rising 0.4% to $2,338.88 per ounce, and US gold futures gaining 0.6% to $2,346.80. Investors are awaiting the Federal Reserve's meeting minutes for insights on future rate cuts. The dollar's dovish stance after Fed Chair Jerome Powell's comments has supported gold.

Oil prices rose, with Brent crude futures up 0.5% to $86.70 per barrel and US West Texas Intermediate crude futures also up 0.5% to $83.23 per barrel.