Yen Weakens, Walmart's JD.com Stake Sale Hits Shares

Asian markets declined on Wednesday, with Japanese stocks pressured by a weakening yen, now at 145.5 per dollar, and JD.com shares falling sharply after Walmart announced plans to sell its stake. In the US, the S&P 500 missed matching a 20-year winning streak by one day, as investors awaited the latest Fed minutes and labour data revisions. Gold continued its upward trend, reaching over $2,500 an ounce.

Equities

The FTSE 100 fell 1% on Tuesday, marking its biggest one-day drop since 5th August. Energy stocks were the main contributors to the decline, as Shell and BP both dropped nearly 3% amid falling oil prices driven by concerns over weak Chinese demand and potential easing of supply issues in Gaza. Meanwhile, BT Group shares tumbled 6.4% after CityFibre, a rival internet provider, struck a deal with Sky to launch broadband services on its network, undercutting BT's existing partnership with Sky. In contrast, i3 Energy shares surged as much as 28% following a £174.1 million takeover offer from Canada’s Gran Tierra Energy. Antofagasta saw a marginal gain after reporting a 5% rise in half-year profits.

In the US, the major stock indices ended slightly lower, snapping a multi-session rally ahead of the Jackson Hole Economic Symposium. The Dow Jones Industrial Average dipped 0.15% to 40,834.97, the S&P 500 slipped 0.20% to 5,597.12, and the Nasdaq Composite fell 0.33% to 17,816.94. Energy stocks in the S&P 500 led the declines, falling 2.7%. Notable among individual companies, Boeing shares fell 4.2% following the Federal Aviation Administration’s announcement of an airworthiness directive for the 787 Dreamliner.

On the positive side, shares of Eli Lilly rose 3.1% after its weight-loss drug Zepbound was shown to significantly reduce the risk of developing Type 2 diabetes in pre-diabetic adults. Palo Alto Networks also saw a substantial gain, with its stock jumping 7.2% after the company’s fiscal 2025 revenue and profit forecasts exceeded analyst expectations. Trading volume on US exchanges was lower than average, with 9.93 billion shares exchanged compared to the 20-day average of 12.22 billion shares.

Forex & Commodities

The US dollar hit its lowest level of the year against the euro on Wednesday, pressured by anticipation surrounding key US payroll data revisions and an upcoming speech by Federal Reserve Chair Jerome Powell. The dollar also slipped below the crucial 145 yen threshold, indicating a broader weakening trend as US bond yields continued to decline, reaching their lowest levels since early August. The euro rose to $1.1132 at its peak before easing back slightly, while sterling hovered around $1.3027, close to its highest level in over a year, reflecting the dollar’s broader softness.

Gold remained just below its all-time high of $2,531.60, supported by investor optimism regarding potential US interest rate cuts. The precious metal has benefited from geopolitical tensions and uncertainty surrounding the upcoming US presidential elections, which have fueled a rally this year. Investors are now looking ahead to the release of the Federal Reserve's July meeting minutes and Powell's speech at the Jackson Hole symposium, both of which are expected to provide further insight into the Fed’s monetary policy direction.

Oil prices edged lower, with Brent crude trading at $77.09 per barrel and West Texas Intermediate at $73.03. The decline was driven by rising US crude inventories, which pointed to potential oversupply in the market, and signs of easing tensions in the Middle East following diplomatic efforts to broker a ceasefire in Gaza.