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At Tuesday's close, the Dow Jones Index (US30) decreased by 0.14%, while the S&P 500 Index (US500) was down 0.16%. The Nasdaq Technology Index (US100) closed negative 0.06%.

Spotify (SPOT) shares are up 2.11% after reporting stronger-than-expected subscriber growth and higher-than-expected gross profit. Tesla's (TSLA) second-quarter net income fell 45% from a year ago as sales of the company's electric vehicles declined globally despite price cuts and low-interest financing. Tesla Inc shares fell 3% after the report was released. Alphabet Inc. (GOOG) reported second-quarter financial results on Tuesday that mostly exceeded analysts' expectations. The company reported adjusted earnings per share (EPS) of $1.89, slightly above the consensus estimate of $1.83. Revenue for the quarter totaled $84.74 billion, which was also above analysts' average prognosis of $84.16 billion. Google shares rose 2.2 percent after-hours trading. Visa (V)'s third-quarter revenue growth fell short of Wall Street expectations as high borrowing costs curbed consumer spending, sending shares of the world's largest payment processor down 2.1% in extended trading.

Recently, the market has viewed a Trump victory as favorable for the dollar. A Trump administration would likely pursue tax cuts and stimulative fiscal policy, which would be hawkish for Fed policy and thus favorable for the dollar. In contrast, a victory for Vice President Harris would favor the status quo and would not support the dollar.

Markets are awaiting Friday's PCE deflator report to see when inflation might fall enough for the Fed to start cutting rates. The PCE deflator is the Fed's preferred inflation gauge. The consensus on Friday is that the June PCE deflator will fall to 2.4% y/y from May's 2.6%, and the June core PCE deflator will fall to 2.5% y/y from May's 2.6%. A decline in the PCE index could support indices that have been corrected for the past few days.

Equity markets in Europe traded flat on Tuesday. German DAX (DE40) rose by 0.82%, French CAC 40 (FR40) closed down 0.31%, Spanish IBEX 35 (ES35) added 0.62%, British FTSE 100 (UK100) closed negative 0.38%. European equity markets opened lower on Wednesday as disappointing earnings reports weighed on investor sentiment. LVMH reported lower sales growth in the second quarter as Chinese consumers curbed spending on luxury goods, while Deutsche Bank recorded a quarterly loss after provisioning for ongoing litigation against its Postbank unit.

WTI crude prices rose to above $77 a barrel on Wednesday after falling for four consecutive sessions, helped by a larger-than-expected decline in US oil inventories. API data showed a 3.9 million barrel decline in inventories last week, marking the fourth straight week of decline and exceeding market estimates of a 2.5 million barrel drop. Renewed optimism over ceasefire talks between Israel and Hamas also put downward pressure on prices after Israeli Prime Minister Benjamin Netanyahu said a ceasefire agreement could take shape.

Asian markets were predominantly down yesterday. Japan's Nikkei 225 (JP225) decreased by 0.01%, China's FTSE China A50 (CHA50) was down 1.55%, Hong Kong's Hang Seng (HK50) lost 0.94%, while Australia's ASX 200 (AU200) was positive 0.50%.

Malaysia's annual inflation rate unexpectedly came in at 2.0% for June 2024, below market expectations of 2.2%, and stable for the second consecutive month. The reading remained at its highest level since August 2023. Core consumer prices, excluding volatile fresh food and administrative expenses, rose 1.9% y/y in June, maintaining the same pace for a third month and remaining at the highest since December 2023.

Jibun Bank's Japan Manufacturing PMI unexpectedly fell to 49.2 in July 2024 from 50.0 in the previous month, missing market estimates of 50.5 and indicating the first contraction in factory activity since April. The latest data also marked the fifth contraction in the manufacturing sector this year amid a fresh drop in output. The flash data showed that Japan's services PMI from Jibun Bank jumped to 53.9 in July 2024 from 49.4 in the previous month. It was the sixth rise in the services sector this year and the sharpest since April, as new orders rose by the most in three months and employment growth accelerated.

• S&P 500 (US500) 5,555.74 −8.67 (−0.16%)
• Dow Jones (US30) 40,358.09 −57.35 (−0.14%)
• DAX (DE40) 18,557.70 +150.63 (+0.82%)
• FTSE 100 (UK100) 8,167.37 −31.41 (−0.38%)
• USD Index 104.44 +0.12 (+0.12%)
   

Important events today:

• Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• Australia Services PMI (m/m) at 02:00 (GMT+3);
• Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• Japan Services PMI (m/m) at 03:30 (GMT+3);
• Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
• Germany Services PMI (m/m) at 10:30 (GMT+3);
• Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• UK Services PMI (m/m) at 11:30 (GMT+3);
• US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• US Services PMI (m/m) at 16:45 (GMT+3);
• Canada BoC Interest Rate Decision at 16:45 (GMT+3);
• Canada BoC Monetary Policy Statement at 16:45 (GMT+3);
• US New Home Sales (m/m) at 17:00 (GMT+3);
• US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• Canada BoC Press Conference at 17:30 (GMT+3);
• FOMC Member Bowman Speaks at 23:05 (GMT+3).

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