Meta, Microsoft, Tesla Earnings Await as Fed Decision Looms

Meta, Microsoft, and Tesla are set to report earnings today, with investors reassured that China’s DeepSeek won’t threaten Nvidia’s AI-driven valuation. The Nikkei rebounded 0.5% after a three-day decline, while Australia's ASX 200 rose 0.9% following softer inflation data that boosted rate cut expectations. Traders anticipate the Fed will hold rates steady, while the ECB is expected to cut tomorrow, with Trump’s pending tariff announcements adding uncertainty.

Equities

The FTSE 100 rose 0.3% to 8,533.87, recording its best day in over a week as global technology stocks stabilised. The domestically focused FTSE 250 climbed 1.1%, ending a four-day losing streak. The household goods and home construction sector led the gains, rising 2.4%.

Technology and services provider Computacenter surged 8.8% after reporting its most profitable second half in company history. The retail sector advanced 2.3%, driven by a 5.4% gain in Pets at Home Group following its third-quarter results. Industrial metal miners dropped 1.6% to their lowest level in over two weeks as copper prices fell.

The pound slipped 0.5% after three consecutive days of gains, helping exporters. Meanwhile, business leaders met with Prime Minister Keir Starmer and finance minister Rachel Reeves to discuss economic growth priorities.

On Wall Street, the Nasdaq rose 2% as technology stocks rebounded from Monday’s sharp sell-off. Nvidia jumped 8.9% after losing 17% the previous day, which erased $593 billion from its market value. The S&P 500 technology sector climbed 3.6%, its biggest daily increase since July, while the semiconductor index gained 1.1%. Apple rose 3.7% ahead of its quarterly results later in the week.

The S&P 500 rose 0.9% to 6,067.70, while the Dow Jones added 0.3% to 44,850.35. Royal Caribbean soared 12% after issuing an upbeat annual profit forecast. Boeing rose 1.5% despite posting its largest annual loss since 2020. General Motors dropped 8.9% after releasing its results and outlook, with concerns over potential tariffs weighing on investor sentiment.

Forex & Commodities

The US dollar strengthened against the Japanese yen, rising 0.6%, and gained 0.2% on the Swiss franc. The euro declined 0.6%, reversing gains made during Monday’s risk-off sentiment. Investor focus remained on trade tensions, with the White House reaffirming that US President Donald Trump plans to impose 25% tariffs on Canada and Mexico on Saturday. Treasury yields remained steady, with the 10-year yield at 4.538%.

Gold prices held steady at $2,761.93 per ounce in early Wednesday trading, recovering from Monday’s selloff when investors liquidated bullion to cover losses from sharp declines in technology stocks. US gold futures inched up 0.1% to $2,769.80.

Brent crude oil edged down 0.1% to $77.42 per barrel, while US crude futures slipped to $73.70 per barrel. US crude and gasoline inventories increased, according to API data, while distillate stocks declined. Market sentiment was also affected by Libya’s National Oil Corp confirming normal export operations following talks with protestors. Additional pressure on oil prices stemmed from concerns over Trump’s energy policies, which aim to boost US production. The White House reaffirmed plans to introduce 25% tariffs on imports from Canada and Mexico on Saturday, but the potential impact on oil flows remains uncertain. Canada supplied nearly half of US oil imports in 2023, with Mexico contributing 733,000 barrels per day.