US Stocks Mixed on Earnings Reports – Dow up 0.4%
US stock indices were mixed in trading yesterday after earnings reports pointed to tariff impacts starting to hit industries. The S&P did grind 0.06% higher to notch up another fresh high, the Dow also added 0.4%, while the tech-heavy Nasdaq dropped 0.35%. Treasury yields dropped again, the 2-year losing 2.7 basis points to 3.833%, the 10-year down 3.4 basis points to 4.344%, as President Trump continued to push the Fed to cut rates. The dollar took another step lower against the majors as traders looked ahead at tariff deadlines, the DXY down 0.48% to 97.38. Oil prices dropped for the third session on the trot, Brent down 0.58% to $68.81 and WTI off 0.97% to $65.31. Gold again attracted more haven flows, powering up 1.01% to a five-week high at $3,430.76 by the NY close.
Fed Pressure Hitting the Dollar
The dollar has taken a hit over the last few trading sessions as President Trump continues to pressure the Federal Reserve Bank in general and Chairman Jerome Powell in particular over interest rate cuts. Markets are starting to price in the possibility of the Fed Chair leaving his post in one way or another before the end of his tenure, and the greenback is taking a big hit on the back of this, as most believe this would lead to a more dovish FOMC. Trade concerns are also weighing on the dollar as tariff deadlines approach, with some deals looking far from certain. The EU, in particular, could be facing tariffs of up to 30% after August 1, and this would lead to some strong moves for the single currency. It is another quiet calendar day today, and FX traders are preparing for more volatility on geopolitical updates. Any further pressure on the central bank from the White House is likely to lead to more downside moves for the dollar.
Quiet Calendar Day Ahead for Traders
It is a very quiet day on the macroeconomic calendar today; however, traders are expecting to see more moves across financial markets as fresh trade updates hit the newswires and major earnings reports come out later in the day. Asian markets have little direction from the US on the open today after a mixed day on Wall Street, and there is nothing on the calendar to add fresh direction, so traders are expecting a relatively muted start to the day. It is a similar story in the European session today, with nothing of note scheduled; however, any further updates on trade negotiations between the EU and the US are expected to move markets. The New York session does see Existing Home Sales data drop, but most traders are expecting big tech earnings numbers, with Alphabet leading the way, and geopolitical updates to dominate sentiment.
