Key facts
- European shares fell, led by a significant drop in the luxury sector after mixed results from Kering and Hermes.
- Global stocks were muted as investors awaited the Federal Reserve's policy decision and tech earnings.
- Technology shares declined following SK Hynix's quarterly results missing high expectations.
- Brent crude futures rose due to Middle East tensions.
- The Federal Reserve is expected to hold interest rates steady, but a year-end hike is possible.
- 85.2% of S&P 500 companies reporting earnings have surpassed expectations.
Global stocks traded with little momentum as investors awaited the Federal Reserve's monetary policy decision and key tech earnings reports. European shares edged lower, led by a 2.4% drop in the luxury sector, with Kering jumping 17% and Hermes tumbling 11% after diverging results. Technology shares declined following South Korean chipmaker SK Hynix's quarterly results falling short of high investor expectations, raising concerns about AI valuations and broader sector performance.
Futures for the S&P 500 and Nasdaq 100 edged higher, while Dow futures dipped. The Nasdaq has recently hit a three-month low due to tech concerns, prompting a focus on other sectors like consumer staples and healthcare. The broader MSCI All Country World Price index dipped, nearing a one-month low.
The Federal Reserve is expected to hold interest rates steady, but markets are pricing in at least one rate hike by year-end, influenced by persistent inflation concerns including tariff costs and energy prices. Middle East tensions contributed to a rise in Brent crude futures, adding to market uncertainty and potentially impacting inflation outlooks.
Despite the broader tech weakness, Seagate Technology rose after forecasting strong quarterly results, and Bloom Energy jumped on raised annual forecasts. Ford Motor also gained after increasing its profit outlook. The current earnings season has shown strong corporate performance, with a high percentage of S&P 500 companies surpassing expectations.