US Stocks Rise as Fed Call and AI Earnings Loom: Markets Wrap
(Bloomberg) — US stocks drifted higher ahead of earnings from two of the world’s biggest spenders on artificial intelligence and a US interest-rate decision where markets still see room for a hike.
S&P 500 futures rose 0.2%. Those for the Nasdaq 100 were flat after the latest selloff in chipmakers left the index on the brink of a technical correction. Treasuries stalled after three days of gains, with traders assigning about a 30% chance of a Federal Reserve rate increase. The dollar barely budged.
Earnings from Meta Platforms Inc. and Microsoft Corp. arrive as the AI trade is faltering, with traders questioning whether the vast and often debt-fueled spending behind the global buildout of the technology can deliver adequate returns.
Chipmakers are also getting punished amid doubts over whether lofty margins can be sustained. Memory maker SK Hynix Inc. plunged nearly 10% in South Korea, extending a rout that has wiped more than $700 billion off its market value in little more than a month.
“I hope that Meta and Microsoft can confirm the capex spree in the industry and reassure the market about semiconductors,” said Fares Hendi, a portfolio manager at Société de Gestion Prévoir in Paris.
In Europe, the Stoxx 600 swung from gains to a 0.2% loss on a busy day for earnings. The region’s luxury sector saw diverging fortunes for two of its biggest names, with Kering SA rallying after Gucci sales topped estimates and Hermès International SCA getting hit by a lack of growth in China.
The latest flare-up in the Middle East had little knock-on effect on stocks and bonds. A dayslong lull in hostilities came to an abrupt end after Iran fired on American forces overnight and the US and Saudi Arabia struck Tehran-backed militias in Iraq. Brent rose 3.3% to $86.90, ending a 16% three-day loss.
A dovish signal from the Federal Reserve to hold rates at current levels would be “the best outcome” for stocks, according to the JPMorgan Market Intelligence team.
Their scenario analysis shows a 28% probability of the central bank keeping rates unchanged, while sounding accommodative on the inflation outlook. That would trigger gains of between 0.5% and 1% in the S&P 500. Their base case, with 50% odds, is for a hawkish hold, where the Fed warns about staying vigilant on inflation.
“Global markets will be bracing for the Fed meeting as we’re bound to have a surprise,” noted Michiel Tukker at ING Bank. “The narrative around the decision matters too.”
Corporate News:
Deutsche Bank AG’s revenue from fixed-income trading jumped in the second quarter as the unit outperformed most of its US peers. SK Hynix Inc. earmarked at least $31 billion in capital spending this year after reporting a six-fold surge in quarterly profit, a record outlay that coincides with growing fears about overinvestment in AI capacity. UBS Group AG announced a new $3 billion share buyback program to run until mid-2027, giving investors more clarity on payouts amid ongoing uncertainty over the bank’s future capital requirements. Standard Chartered Plc unveiled a fresh $1 billion share buyback as second-quarter earnings beat expectations, while it booked more charges tied to the conflict in the Middle East. Porsche AG reaffirmed its full-year earnings guidance after first-half profitability rose, offering tentative signs that the sports-car maker’s turnaround is beginning to gain traction. Hermès sales rose in line with expectations as the Birkin bag maker weathered a downturn in the demand for luxury goods better than its peers. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.2% as of 9:54 a.m. London time S&P 500 futures rose 0.2% Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index fell 0.7% The MSCI Emerging Markets Index fell 1.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1398 The Japanese yen rose 0.2% to 163.58 per dollar The offshore yuan was little changed at 6.7669 per dollar The British pound rose 0.1% to $1.3307 Cryptocurrencies
Bitcoin rose 0.8% to $64,328.2 Ether fell 0.2% to $1,913.1 Bonds
The yield on 10-year Treasuries was little changed at 4.61% Germany’s 10-year yield advanced two basis points to 3.13% Britain’s 10-year yield advanced three basis points to 4.97% Commodities
Brent crude rose 3.3% to $86.90 a barrel Spot gold rose 0.2% to $4,039.23 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sagarika Jaisinghani.
©2026 Bloomberg L.P.
