Global markets maintained a positive trend as expectations that negotiations between the parties in the Middle East could resume and concerns over energy supplies eased. The decline in oil prices also reduced pressure on bond yields.
The price of October-dated Brent crude fell 2.6% to $86.3 a barrel. The yield on the U.S. 10-year Treasury note was flat at 4.65%, while the dollar index rose 0.1% to 98.9 and gold fell 0.4% to $4,641 an ounce.
Data and Nvidia earnings in focus in U.S. markets
While concerns over inflation persisted in the United States, expectations that the Federal Reserve could raise interest rates once more by the end of the year remained strong. Investors are monitoring growth and personal consumption expenditure data, as well as the core personal consumption expenditures price index, which is closely watched for signs of price increases.
A possible slowdown in the core personal consumption expenditures price index could alter expectations regarding the Fed’s monetary policy steps. This could increase volatility in the markets.
Chipmaker Nvidia’s earnings report, which is expected to be released, was also in focus. The report is being watched for signs of whether the artificial intelligence-driven rally will continue, while the company’s shares gained 2.2% after seven consecutive trading days of declines.
The S&P 500 rose 0.32%, the Nasdaq gained 0.66% and the Dow Jones advanced 0.30%. U.S. index futures started the day mixed.
Canada imposes retaliatory tariffs on U.S. products
The Canadian government announced that it would impose retaliatory tariffs of 15%, 25% or 50% on approximately $20 billion worth of U.S. products starting September 8, in response to the 50% tariffs imposed by the United States on many Canadian products.
Canada’s Department of Finance said the retaliatory tariffs would focus on sectors including steel, dairy products, household appliances, agricultural equipment, paper and electronics. Steel and aluminum products, furniture and clothing, which had previously been subject to a 25% retaliatory tariff, will face a 50% tariff.
Home appliances, dairy products such as cheese, fish and seafood, and certain steel and aluminum derivative products will be among the goods subject to a 25% tariff.
German data influence European stock markets
European stock markets traded mostly higher, except in France. Expectations that energy costs could decline and macroeconomic data from Germany influenced pricing in the region’s markets.
Germany’s gross domestic product increased 0.3% in the second quarter from the previous quarter and 1% year on year. The Business Climate Index released by the Munich-based ifo Institute for Economic Research also rose to 88.8 points in August, extending its increase to a fourth consecutive month.
The FTSE 100 in the United Kingdom rose 0.29%, Italy’s FTSE MIB 30 gained 0.34% and Germany’s DAX 40 advanced 0.61%. France’s CAC 40 fell 0.16%.
Shares of luxury fashion and accessories companies declined notably in France. Rising living costs in Europe, the impact of tensions between the United States and Iran on regional tourism, and slowing demand put pressure on luxury consumer stocks.
Semiconductor stocks rise in Asian markets
Increased risk appetite in the United States and Europe also spread to Asian markets. Technology and semiconductor stocks recovered ahead of Nvidia’s earnings report.
Shares of SK Hynix rose 2.5% and Samsung Electronics gained 2.9% in South Korea, while Hanmi Semiconductor advanced 1.2%. Shares of SMIC, China’s largest semiconductor manufacturer, also rose 4.8%.
Near the close, Japan’s Nikkei 225 was up 0.8%, China’s Shanghai Composite gained 0.6%, South Korea’s Kospi rose 1.8% and Hong Kong’s Hang Seng advanced 0.6%.
Türkiye’s CDS falls to 217 basis points
The BIST 100 index on Borsa İstanbul ended the day down 0.19% at 14,473.42 points. The August contract based on the BIST 30 index on Borsa İstanbul Futures and Options Market rose 0.24% in the evening session compared with the regular-session close.
Türkiye’s five-year credit default swap spread fell to 217 basis points on expectations that geopolitical risks in the Middle East could ease and amid the impact of domestic liquidity-management measures. This was the lowest level recorded since February 18.
Dollar/Turkish lira ended the previous day at 48.0920. The exchange rate traded at 48.1170 at the opening of the interbank market, up 0.1%.
While the domestic data agenda is expected to remain quiet, U.S. personal consumption expenditure and growth data will be monitored abroad. In the BIST 100 index, 14,400 and 14,300 points stand out as support levels, while 14,600 and 14,700 points are seen as resistance levels.
Data to watch
- Weekly mortgage applications in the United States
- July personal income in the United States
- July personal spending in the United States
- July personal consumption expenditures price index in the United States
- July durable goods orders in the United States
- Annualized second-quarter GDP data in the United States
