Asian stocks rose 0.7%, led by South Korea, driven by expectations of Federal Reserve interest rate cuts following a weak U.S. jobs report.
Markets now price in a 95% chance of a Fed rate cut in September, up from 80%, with a 99% likelihood of a 25-basis-point move - spurred by signs of a softening job market and no persistent tariff-driven inflation.
The MSCI Asia Pacific Index gained, while S&P 500 futures rose 0.2% after the index’s strongest rally since May.
European futures climbed 0.4%. Treasuries dipped slightly, with two-year yields at 3.70%.
The dollar edged up 0.1%, and oil prices stabilized as investors assessed risks to Russian supplies amid U.S. threats to penalize India for buying Moscow’s crude - causing Indian stocks to fall 0.3% and the rupee to weaken.
S&P 500 earnings grew 9.1% in Q2, exceeding expectations. However, Wall Street firms like Morgan Stanley and Deutsche Bank warned of a potential S&P 500 pullback due to high valuations and worsening economic data.
On tariffs, the EU expects Trump to lower levies on cars and exempt some industrial goods, while Switzerland and Japan push for tariff relief.
Corporate highlights include Palantir’s 48% revenue surge to $1 billion, Tesla’s $30 billion stock award to Elon Musk, Saudi Aramco’s profit decline, SoftBank’s investments in Nvidia and TSMC, and Infineon’s flat sales forecast due to tariff uncertainties.
USD, gold, and oil were little changed.
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Bitcoin fell 0.4% to $114,343.51
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Ether fell 1.1% to $3,661.27
In the day ahead: PMI releases across Europe and ISM Services PMI in the U.S. are the key data points.
