Global stocks experienced a decline on Wednesday as the earnings reporting season picked up pace for major companies, with investors displaying a lack of excitement over the results thus far.
Germany’s DAX dropped 1.1% to 18,363.59, while the CAC 40 in Paris was down 1.6% to 7,475.17. In London, the FTSE 100 declined 0.5% to 8,126.38.
Shares of luxury conglomerate LVMH fell 5% in early trading following quarterly sales that fell short of market expectations.
The futures for the S&P 500 and the Dow Jones Industrial Average were down 0.8% and 0.5%, respectively.
Meanwhile, Japan’s benchmark Nikkei 225 slipped 1.1% to 39,154.85, with the Japanese yen trading at its highest level in weeks ahead of a Bank of Japan policy decision next week.
The U.S. dollar had been trading over 162 yen earlier this month but has weakened in recent days. Anticipation of a potential increase in the BOJ’s interest rate and a potential rate cut by the Federal Reserve have contributed to the yen’s recent strength.
On the economic front, a business survey released on Wednesday revealed a contraction in Japan’s factory activity in July. However, services showed growth, boosting overall activity in Japan’s private sector.
Elsewhere, Hong Kong’s Hang Seng lost 0.9%, Australia’s S&P/ASX 200 edged 0.1% lower, and South Korea’s Kospi dropped 0.6%.
On Tuesday, the S&P 500, Dow Jones Industrial Average, and Nasdaq composite all experienced slight declines, while the Russell 2000 continued its upward trend.
As dozens of companies reported their spring results, expectations of strong profit growth for S&P 500 companies were high. Yet, initial reactions from investors were subdued.
Electric vehicle maker Tesla saw a 45% decline in second-quarter net income compared to the previous year, while Alphabet Inc., Google’s parent company, reported steady growth with some disappointments in YouTube ad revenues.
With expectations of the Federal Reserve lowering interest rates in September, financial markets could experience some relief after an extended period of high rates.
Additionally, U.S. benchmark crude oil and Brent crude both saw gains in trading.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
