Anticipated Profits from Meta and Microsoft Could Initiate Early Gains on the New York Stock Exchange
Market Recap: Mixed Performance as Recession Concerns Linger
Asian stocks ended mostly lower on Thursday, with Chinese factory activity unexpectedly deteriorating in July to a three-month low. The All Ordinaries Index in Australia ended 0.2 percent lower, and New Zealand's benchmark S&P/NZX-50 Index fell 0.3 percent. Japanese markets rallied, the yen strengthened, and shorter-dated bonds pared declines after the Bank of Japan revised up its inflation forecasts, causing the Nikkei 225 Index to jump 1.0 percent, while the broader Topix Index settled 0.8 percent higher.
European stocks showed a mixed performance. The German DAX Index and the French CAC 40 Index were down by 0.2 percent and 0.4 percent respectively, while the U.K.'s FTSE 100 Index was up by 0.3 percent. The economy rebounded by more than expected in the second quarter of 2025, according to a report by the Commerce Department. However, this was tempered by indicators in consumer spending, housing, manufacturing, and potential impacts of new tariffs announced by the Trump administration.
U.S. index futures are pointing to a sharp increase at the opening on Thursday. This positive outlook contrasts with earlier declines as markets adjusted to recent weak U.S. jobs data and growing recession fears. The CME FedWatch tool indicated an 85% chance of a September rate cut, up significantly from a week earlier, which bolstered market sentiment. Specific company news such as gains in Tesla and Joby Aviation shares also added early upward momentum to futures.
However, concerns over economic weakness remain, with the core PCE price index, which excludes food and energy prices, rising by 0.3 percent in June. Hotel group Accor plunged 12 percent as revenue per available room (RevPAR) came in below forecasts in the second quarter. In Germany, the number of people out of work increased by 2,000 in July, significantly below analyst expectations.
ArcelorMittal, the world's second-largest steelmaker, shed 3.6 percent after cutting its forecast for steel demand outside of China. Veolia Environnement, a French utilities company, declined 1.6 percent after reporting a decline in first-half revenue. Ipsen, a specialty care biopharmaceutical company, lost 4 percent despite delivering strong first-half results and upgrading its full-year guidance.
Energy major Shell advanced 1.5 percent as second-quarter profit beat expectations and the company said it would buy back $3.5 billion of shares over the coming three months. British American Tobacco gained more than 1 percent as first-half profit beat estimates. Swiss cement giant Holcim rose 1.1 percent as second-quarter profit came in above expectations.
Airline Lufthansa was marginally higher and peer Air France-KLM surged 4.3 percent after reporting higher second-quarter profits. Reinsurer SCOR slumped 4 percent despite reporting strong Q2 results. MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of July. The Chicago business barometer is expected to rise to 42.0 in July.
In the U.S., personal income rose by 0.3 percent in June and personal spending also increased by 0.3 percent in June. The less volatile four-week moving average of U.S. jobless claims slipped to 221,000. First-time claims for U.S. unemployment benefits edged slightly higher in the week ended July 26th.
In the corporate sector, Sanofi gave up nearly 3 percent on reporting lower-than-expected profit for the second quarter. Drug maker Pfizer rose 2.6 percent after beating estimates. Shares of Microsoft are surging by 8.8 percent due to fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.
The U.S. dollar is trading at 150.23 yen and $1.1429 against the euro. Crude oil futures are falling $0.32 to $69.68 a barrel, and gold futures are rising $9.80 to $3,362.60 an ounce.
In the tech sector, Facebook parent Meta Platforms is spiking by 11.3 percent in pre-market trading due to better than expected second quarter results and upbeat third quarter revenue guidance. Seoul stocks ended slightly lower to snap a six-day winning streak as investors assessed Samsung's second-quarter earnings results.
German defense electronics maker Hensoldt rallied 3.5 percent as it reported solid revenue growth and a record order backlog in its H1 2025 results. Lender Societe Generale surged 6.2 percent after raising its full-year profitability target. France's Safran surged 4 percent and U.K.'s Rolls-Royce Holdings soared 9 percent after raising their profit outlooks.
[1] Reuters [2] CNBC [3] MarketWatch
- In light of the mixed stock market performance and lingering recession concerns, individuals may want to carefully consider their financial decisions and potentially seek professional advice before investing in the business sector.
- As the economy continues to show signs of rebounding and companies like Facebook and Microsoft report positive earnings, some investors might view this as an opportunity to invest in the tech sector, while remaining cautious about potential economic weakness.
