07/02/2025 Daily Reports
US Futures Waver as Disappointing Tech Earnings Spark Caution, European Markets Rally on Rate Cut Optimism
- US equity futures dipped amid significant premarket losses in major companies. Qualcomm fell over 5% amid worries that smartphone demand will cool, Ford dropped 6% on concerns over the impact of US tariffs on carmakers, and Skyworks Solutions plunged more than 20% due to intensifying competition. Honeywell also slid over 5% after announcing plans to split into separate entities under activist investor pressure.
- Treasury Secretary Scott Bessent noted the Trump administration’s focus on reducing the 10-year Treasury yield, prompting investors to reassess Fed policy expectations amid persistent inflation and strong economic activity.The 10-year yield ticked slightly higher, remaining near a one-month low.
- Upcoming earnings—including Amazon’s—and US jobs data are expected to further shape the outlook. Meanwhile, European markets performed better: the Stoxx 600 advanced 0.3%, bolstered by strong results from companies like Societe Generale and AstraZeneca, while A.P. Moller-Maersk surged nearly 9% on a $2 billion buyback announcement. UK stocks outperformed following a Bank of England rate cut, even as the pound weakened.
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US Markets Steady as Revised Payroll Data Eases Fears; Jobs Report Looms
- US equity futures, bonds, and the dollar traded in narrow ranges as investors awaited the upcoming monthly jobs report to further clarify the Fed’s policy outlook.
- The S&P 500 is on track for a modest 0.7% weekly gain while 10-year Treasury yields held at 4.43%.
- Revised data revealed that the US economy shed 598,000 jobs over the past 12 months—less than earlier estimates—suggesting a gradual cooling of the labor market.
- Economists now forecast around 175,000 new roles for the current month, although any unexpected uptick in hiring could reignite inflation concerns and alter rate-cut expectations.
- European markets also remain cautious amid mixed economic signals and the anticipation of further policy updates.
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Fed Rate Outlook in Focus as Markets Await US Jobs Data
Jobs Data in Focus: Will It Shift Fed’s Rate Cut Timeline?
- Markets are treading cautiously ahead of the US nonfarm payrolls report, which could shape expectations for Fed rate decisions. Here are the key highlights:
US & European Futures in the Red
- Euro Stoxx 50 futures fell 0.3%, while S&P 500 futures declined 0.2%.
- Asian markets rallied as the Hang Seng Tech Index jumped 2.9%, officially entering a bull market.
Bonds & Dollar Hold Steady
- The US 10-year Treasury yield edged up to 4.45%.
- The Dollar Index gained slightly.
US Jobs Report Expectations
- Forecast: 175,000 new jobs added.
- Weaker-than-expected data could strengthen rate cut expectations.
- Stronger-than-expected data could delay Fed cuts and weigh on risk assets.
Amazon Shares Drop
- Earnings guidance missed expectations, leading to a decline in after-hours trading.
- Increased AI investments are putting pressure on short-term profitability.
Gold & Oil Seek Direction
- Gold rebounded to $2,863 after pulling back from record highs.
- Oil prices fluctuated as Trump’s stance on crude prices countered Iran sanction concerns.
What’s Next?
- Markets remain in wait-and-see mode, with the US jobs data expected to be a major volatility trigger.
- A balanced number could bring stability, but any surprise might shift Fed rate expectations, impacting equities, bonds, and forex markets. Short-term opportunities may emerge, but risk management is key.
