Stocks advance ahead of Microsoft, central banks: Markets wrap

US stocks were set to extend gains as traders prepared for a raft of economic data releases, US tech earnings and central bank decisions that will be critical in shaping the trajectory of market.

Futures contracts for the S&P 500 and Nasdaq 100 respectively rose 0.2% and 0.3% on Tuesday, while the dollar and Treasuries were little changed.

Europe’s Stoxx 600 index advanced 0.4% after the euro-area economy expanded more than expected in the second quarter, easing fears about the pace of an economic recovery.

Later on Tuesday, traders’ focus will turn to a Microsoft’s earnings release due after the US close to determine whether megacaps can turn the tide after an underwhelming start to the reporting season.

An index tracking the so-called Magnificent Seven technology stocks lost almost 9% in the two weeks through July 26 after investors turned skeptical about the scope for returns from investment in artificial intelligence. The gauge rebounded by 1% on Monday.

“For anything AI related, we’ve been in the investment phase but now we want to see how it translates in terms of return on investment,” said Lionel Jardin, equity sales trader at Marex in Paris.

Apple, Meta Platform and Amazon.com are due to report later this week.

Also in focus are monetary policy decisions from the Bank of Japan and the US Federal Reserve on Wednesday, followed by the Bank of England a day later.

US policymakers are widely expected to keep rates unchanged at a two-decade high. Still, investors expect that officials will signal a move in September as risks grow of imperiling a solid but moderating job market.

Swap traders are currently pricing a full cut for the September-meeting and as much as two further reductions before the end of the year. Further clues about the rate path may come from reports on US consumer confidence and jobs openings due later on Tuesday.

Among premarket stock moves, PayPal Holdings and Pfizer rose after boosting their profit outlooks. CrowdStrike Holdings fell as much as 5.3% after CNBC reported that Delta Air Lines Inc. may seek potential damages following this month’s widespread systems outage.

In Japan, the yen weakened against all its Group-of-10 peers as the BOJ kicked off a two-day policy meeting on speculation that policy tightening would be too slow to dent the appeal of yen-funded carry trades.

Meanwhile, commodities have erased all of their gains this year as a challenging outlook in China, combined with a selloff in US natural gas and losses in foodstuffs, have weighed on raw materials.

Key events this week:

• Eurozone economic confidence, GDP, consumer confidence, Tuesday
• US JOLTS job openings, consumer confidence, Tuesday
• Microsoft earnings, Tuesday
• Eurozone CPI, Wednesday
• Bank of Japan policy decision, Wednesday
• US ADP employment change, Wednesday
• Fed rate decision, Wednesday
• Meta Platforms earnings, Wednesday
• Eurozone S&P Global Eurozone Manufacturing PMI, unemployment, Thursday
• US initial jobless claims, ISM Manufacturing, Thursday
• Amazon, Apple earnings, Thursday
• Bank of England rate decision, Thursday
• US employment, factory orders, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 7:42 a.m. New York time
• Nasdaq 100 futures rose 0.3%
• Futures on the Dow Jones Industrial Average were little changed
• The Stoxx Europe 600 rose 0.4%
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0827
• The British pound fell 0.1% to $1.2847
• The Japanese yen fell 0.5% to 154.79 per dollar

Cryptocurrencies

• Bitcoin fell 1.1% to $66 651.51
• Ether rose 0.5% to $3,338.81

Bonds

• The yield on 10-year Treasuries was little changed at 4.17%
• Germany’s 10-year yield was little changed at 2.36%
• Britain’s 10-year yield was little changed at 4.04%

Commodities

• West Texas Intermediate crude fell 0.7% to $75.27 a barrel
• Spot gold rose 0.2% to $2,389.69 an ounce

This story was produced with the assistance of Bloomberg Automation.