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At Wednesday's close, the Dow Jones Index (US30) was down 0.60%, while the S&P 500 Index (US500) decreased by 0.77%. The Nasdaq Technology Index (US100) closed negative 1.05%. Yesterday, chip stocks gave up early gains and retreated, which had a negative impact on the overall market.

Stocks on Wednesday initially went up on positivity from a rally in Japanese stocks amid dovish comments from Bank of Japan (BoJ) Deputy Governor Uchida, who pledged to refrain from raising interest rates amid volatile markets. Financial markets have been in turmoil since last week, when the BoJ unexpectedly raised interest rates, causing the yen to surge to a 7-month high against the dollar and contributing to a rapid unwinding of yen trading that pulled down risk assets around the world.

Airbnb (ABNB) closed down more than 13% after estimating third-quarter revenue of $3.67 billion to $3.73 billion, below consensus estimates of $3.84 billion, and warning of weaker demand from US vacationers. Illumina (ILMN) closed higher by more than 4% after reporting second-quarter revenue of $1.11 billion, above the consensus prognosis of $1.09 billion.

The Canadian dollar strengthened to 1.37 per US dollar, recovering from an eight-month low of 1.388 hit on August 1, thanks to an improving outlook for foreign exchange inflows and reduced fears of a US recession, which restored global risk appetite. A recovery in oil prices, driven by a sixth consecutive week of declines in US inventories and fears of supply disruptions from the Middle East, further supported the loonie. However, the recent rate cut by the Bank of Canada (BoC) and expectations of further easing of up to 150 basis points over the next year will create headwinds for the Canadian dollar.

Equity markets in Europe were mostly up yesterday. Germany's DAX (DE40) rose by 1.50%, France's CAC 40 (FR40) closed 1.91% higher, Spain's IBEX 35 (ES35) added 2.01%, and the UK's FTSE 100 (UK100) closed positive 1.75%.

WTI crude oil prices rose to around $75.5 per barrel on Thursday, rising for the third consecutive session, driven by a larger-than-expected decline in US crude inventories. EIA data for Wednesday showed crude inventories fell by 3.728 million barrels, the sixth consecutive weekly decline, well above the expected 0.4 million barrel drop. However, gasoline and distillate inventories rose over the period.

Asian markets traded flat yesterday. Japan's Nikkei 225 (JP225) rose by 1.19%, China's FTSE China A50 (CHA50) added 0.13%, Hong Kong's Hang Seng (HK50) gained 1.38%, and Australia's ASX 200 (AU200) was positive 0.25%.

The Reserve Bank of India (RBI) kept the benchmark repo rate at 6.5% for the ninth consecutive meeting in August 2024 to ensure inflation falls to the medium-term target of 4% while supporting growth, in line with market expectations. The latest move came after annual inflation accelerated to a four-month high of 5.08% in June 2024, driven by rising food prices, but remained within the RBI's acceptable target range of 2–6% In addition, the Central Bank maintained its economic growth estimate for FY 2025 at 7.2%, keeping inflation expectations at 4.5%.

• S&P 500 (US500) 5,199.50 −40.53 (−0.77%)
• Dow Jones (US30) 38,763.45 −234.21 (−0.60%)
• DAX (DE40) 17,615.15 +260.83 (+1.50%)
• FTSE 100 (UK100) 8,166.88 +140.19 (+1.75%)
• USD Index 103.20 +0.24 (+0.23%)
   

Important events today:

• – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
• – China Trade Balance (m/m) at 06:00 (GMT+3);
• – New Zealand Inflation Expectations (q/q) at 06:00 (GMT+3);
• – US Initial Jobless Claims (m/m) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

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