Global markets followed a broadly negative course influenced by the selling pressure that started in the U.S., led by technology stocks and lackluster results of Tesla and Google’s parent Alphabet. At the same time, on the macroeconomic data side, all eyes are set on the U.S. growth data, set to be announced later on Thursday.
The U.S. Federal Reserve’s (Fed) expectations of three interest rate cuts by the end of the year to combat inflation continue to grow stronger day by day.
U.S. economic growth likely picked up in the second quarter, spurred by solid consumer spending and inventory building; however, the pace of expansion should still leave expectations of a September interest rate cut from the Federal Reserve intact.
Developments on the political side continue to be watched by investors as possible news flows could have an impact on asset prices, analysts said.
Alphabet’s shares, one of the U.S. technology giants, fell 5.03% on Wednesday due to weak YouTube advertising revenue and inadequacy in artificial intelligence.
Moreover, shares of Tesla, the U.S. electric car manufacturer, fell 12.3% after the company’s financial results announced on Wednesday fell short of forecasts and amid the postponement of the Robotaxi introduction.
In addition, Nvidia’s shares fell 6.8%, Broadcom’s shares fell 7.6% and Arm’s shares fell 8.2% on Wednesday.
Meanwhile, pricing on the copper side continues to attract attention, trading at $4.07, 0.5% below the previous close.
U.S. markets saw a setback on Wednesday, with the Nasdaq index falling 3.64%, the S&P 500 dropping 2.31%, and the Dow Jones decreasing by 1.25%.
The dollar index stands at 104.2, while Brent crude oil prices have stabilized at $80.20 per barrel. The U.S. 10-year bond yield closed at 4.26%, and gold prices were down by 1.1% to $2,372 an ounce.
European stock markets witnessed selling pressure on Wednesday, while macroeconomic data released in the region raised recession concerns.
Given this, the Manufacturing Purchasing Managers’ Index (PMI) fell by 42.6% in Germany and 45.6% in the Eurozone, while in the U.K. increased by 51.8%, above expectations.
The FTSE 100 index in the U.K. dropped 0.17%, France’s CAC 40 index 1.12%, Germany’s DAX 40 index decreased 0.92% and Italy’s MIB 30 index 0.48% on Wednesday.
In Türkiye, the BIST 100 index in Borsa Istanbul closed at 10,991.57 points, down 0.88% from the previous close. The USD/TRY exchange rate traded at 32.9480 at the opening of the interbank market on Thursday.
Asian equity markets witnessed a hardening of pricing, with Japan leading the way.
Speculation of a surprise interest rate hike by the Bank of Japan (BOJ), coupled with selling pressure on U.S. technology stocks, is causing the decline in Japanese equity markets to deepen.
The BOJ is 87% likely to raise interest rates next week, while it is reported that the service sector Producer Price Index (PPI) announced in the country on Thursday surpassed expectations with an increase of 3%, easing the bank’s policy space.
Near the close, Japan’s Nikkei 225 index fell 3.2%, South Korea’s Kospi index 1.7%, and China’s Shanghai index 0.6%, and Hong Kong’s Hang Seng composite index 1.7%.
In Asia, the Chinese central bank surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, marking the latest move to prop up the economy.
