Markets Pause as Investors Await Tech Earnings and Rate Decisions
Global stock markets paused on Tuesday after strong recent gains. Investors showed caution as they waited for key tech earnings and interest rate decisions that could set the tone for the next phase of the rally. Optimism about easing global trade tensions helped keep risk appetite alive, while the ongoing bull run in technology stocks continued to fuel momentum.
Lower Borrowing Costs in Focus
Expectations for lower borrowing costs in the U.S. and Canada supported bond markets and kept the U.S. dollar steady. Traders are now watching closely to see how dovish the Federal Reserve will be during this week’s meeting.
Meanwhile, gold prices retreated below the $4,000 mark per ounce. The precious metal has dropped almost 10% over six sessions as leveraged positions unwound after months of heavy buying.
“There’s a fundamental reason why gold had been rising — strong demand from central banks,” said George Lagarias, chief economist at Forvis Mazars. “This correction is healthy and allows the market to stabilize,” he added.
Stocks Ease After Record Highs
Several global stock indexes that recently hit all-time highs took a breather. Europe’s STOXX 600 fell 0.2% after reaching a record high on Monday. Frankfurt and Paris markets traded flat, while Britain’s FTSE 100 edged to a new peak. Spain’s IBEX also touched a fresh record, surpassing its pre-financial crisis high from 2007.
In the U.S., S&P 500 and Nasdaq futures were slightly higher ahead of the Wall Street open.
“Investors are showing more caution ahead of key risk events, including the FOMC meeting and the start of MAG7 earnings,” said Daniela Hathorn, senior analyst at Capital.com. “A dovish Fed stance combined with strong tech earnings could trigger further gains,” she noted.
Tech Giants Under Pressure
The “Magnificent Seven” — Microsoft, Alphabet, Apple, Amazon, Meta, and others — face high expectations this week. Strong results are essential to justify their stretched valuations after months of relentless buying.
In Asia, Japan’s Nikkei dropped 0.6% after Monday’s 2.5% surge, leaving it up nearly 27% for the year.
Japan’s new Prime Minister Sanae Takaichi met with U.S. President Donald Trump in Tokyo to discuss defense cooperation, trade, and a $550 billion investment agreement signed earlier this year.
The MSCI Asia-Pacific index outside Japan slipped 0.6%, while Chinese blue chips fell 0.2%. The Shanghai Composite Index briefly crossed 4,000 points for the first time since 2015 before closing slightly lower.
Federal Reserve Expected to Cut Rates
In bond markets, 10-year Treasury yields declined to 3.99% as investors anticipate Wednesday’s Fed decision. A quarter-point rate cut is widely expected, but markets are watching for signals about a possible December rate cut as well.
“It’s almost certain we’ll see a cut,” Lagarias said. “The key question is whether the Fed will hint at more easing later this year.”
Some analysts also expect the Fed to end quantitative tightening, which could add further support to liquidity.
Elsewhere, the Bank of Canada is likely to lower rates this week, while the ECB and BOJ are expected to hold steady. In Japan, policymakers are debating the timing of future rate hikes as concerns about a tariff-driven slowdown fade.
The yen strengthened after U.S. Treasury Secretary Scott Bessent called for “sound monetary policy” during talks with Japanese Finance Minister Satsuki Katayama. The dollar fell 0.5% to 152.11 yen, just below Monday’s recent peak of 153.29. The euro edged up to $1.1652, while the dollar index eased to 98.74.
Oil Prices Slip as OPEC+ Considers Output Hike
Oil markets weakened following a Reuters report that eight OPEC+ nations are leaning toward a modest output increase for December, as Saudi Arabia aims to regain market share.
Brent crude fell 1.2% to $64.83 a barrel, while U.S. crude declined 1.1% to $60.61.
