Meta's Stock Crashes, USDJPY Crosses 155

Equities

On Wednesday, Britain's FTSE 100 index reversed earlier gains and closed slightly lower, down by 0.1%, ending a five-day winning streak. This was influenced by a poor performance update from chemicals group Croda, which fell 4.8% after reporting a 10% drop in first-quarter group sales and reiterating a gloomier profit outlook for the year. Luxury retailer Burberry also contributed to the downtrend, dropping 2.6% following a profit warning from its rival, French luxury goods company Kering.

Shares in mining giants like Rio Tinto, Anglo American, and Glencore enjoyed increases of between 1.2% and 4.5%, buoyed by an uptick in metal prices. This helped to keep overall losses more contained. Additionally, Reckitt Benckiser added 2.9% as its quarterly like-for-like sales growth surpassed estimates. Management expressed optimism that reduced price sensitivity among consumers might lead to greater preference for Reckitt’s premium brands over less expensive alternatives.

Across the pond in the United States, the S&P 500 ended a choppy trading session slightly higher, with a marginal increase of 0.02%. This came despite an uptick in Treasury yields, following an auction of a record $70 billion worth of five-year US Treasury notes, which initially put pressure on equities. The tech-heavy Nasdaq Composite also finished the day in positive territory, increasing by 0.10%, while the Dow Jones Industrial Average fell by 0.11%.

Meta Platforms experienced a significant drop, falling 11% in extended hours trading after disclosing that its capital expenditure for 2024 could reach up to $40 billion, overshadowing a revenue beat. Tesla shares, however, jumped 12% following news of planned production increases and the introduction of more affordable vehicle models. Other companies like Boeing and Enphase Energy reported mixed results with Boeing shares falling 2.8% and Enphase Energy dropping 5.5%.

In the tech sector, anticipation is building around forthcoming earnings reports from major players such as Microsoft and Alphabet, which are expected to provide further direction for the market. Meanwhile, Texas Instruments saw a rise of 5.6% after forecasting second-quarter revenue above analyst expectations, contributing to a positive close for the Philadelphia Semiconductor Index. Biogen and Boston Scientific also reported strong earnings, with their shares climbing 4.5% and 5.7% respectively, thanks to earnings that surpassed forecasts. Lastly, Hasbro’s shares climbed nearly 12% after the toymaker reported less severe sales declines than expected and exceeded profit estimates.

Forex & Commodities

The Japanese yen weakened against the US dollar, dropping to 155.26, which is its lowest since the mid-1990s. This move reflects broader strength in the US dollar, which also saw its index rise modestly by 0.2% to 105.84. In contrast, the euro remained stable at $1.0697, and the British pound increased slightly by 0.1% to $1.2460.

Gold prices remained steady at $2,322 per ounce, following a decrease from a record high earlier in the month. Notably, traders are pricing in a 70% chance of a US rate cut by September, which could impact non-yielding assets like gold.

Oil prices showed a decline, with Brent crude falling to $88.02 a barrel and West Texas Intermediate crude dropping to $82.81. Despite this, a significant draw in US crude inventories provided some support against further losses.