Gold holds steady ahead of Fed policy statement

Gold prices steadied on Wednesday as investors held back on making big bets ahead of the Federal Reserve’s policy statement later in the day for cues into future rate cuts, while focus remained on US trade talks ahead of the August 1 deadline.

FUNDAMENTALS

* Spot gold was steady at USD 3,329.19 per ounce as of 0020 GMT. US gold futures GCcv1 rose 0.1% to USD 3,327.70.

* US and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, following two days of talks in Stockholm.

* However, US officials said it was up to President Donald Trump to decide whether to extend a trade truce that expires on August 12 or potentially let tariffs shoot back up to triple-digit figures.

* Meanwhile, the US dollar index held steady after hitting a more than one-month high on Tuesday, making greenback-priced bullion more expensive.

* Investors turned their focus to the Fed’s policy to gauge its future rate cut path, following the central bank’s two-day meeting, during which it is widely expected to keep rates steady, despite Trump’s constant call to lower them.

* The US trade deficit in goods narrowed to its lowest in nearly two years in June as imports fell sharply, cementing economists’ expectations that trade likely accounted for much of an anticipated rebound in economic growth in the second quarter.

* The International Monetary Fund slightly raised its global growth forecasts for 2025 and 2026 on Tuesday, citing stronger-than-expected buys ahead of a jump in US tariffs on August 1 and a drop in the effective tariff rate to 17.3% from 24.4%.

* Meanwhile, on Tuesday, Trump threatened tariffs and other measures on Russia “10 days from today” if Moscow showed no progress toward ending its more than three-year-long war in Ukraine.

* Spot silver held steady at USD 38.20 per ounce, platinum fell 0.4% to USD 1,389.20 and palladium remain unchanged at USD 1,258.75.

(Reporting by Anmol Choubey in Bengaluru; Editing by Sumana Nandy)

Bond investors warm to risk, with Fed staying put in ‘Goldilocks’ economy

NEW YORK – Bond investors are adding portfolio risk after a long period of caution, seeing the US economy in a “Goldilocks” moment, not too hot nor too cold, as they bet the Federal Reserve will leave rates unchanged for a fifth straight policy meeting.

Investors are buying more corporate bonds and adding a little bit more duration to their portfolios, suggesting they’re more comfortable going further out the curve.

The US central bank’s policy-setting Federal Open Market Committee is broadly expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range when its two-day meeting ends Wednesday. Standing pat has been its default stance since December, given a surprisingly resilient economy that has seen a fairly stable labor market and generally subdued inflation.

“Our systems are saying that economic growth seems to be fairly firm, although we could argue that it’s fraying at the edges,” said Jeff Young, head of investment strategy, at PGIM Quantitative Solutions in New Jersey.

“We’ve seen some prices ticking up, but that’s not necessarily overall generalized inflation. It’s a one-off price increase on certain goods and that has allowed the Fed to maintain this wait-and-see posture.”

Futures tracking the Fed’s policy rate show a roughly 65% chance that the central bank will deliver a rate cut in September, with another possible at the October or December meetings. All told, rates futures on Monday implied about 44 basis points (bps) of easing in 2025, or just under two rate declines of 25 bps each.

The Fed reduced rates three times in 2024 before pausing its easing cycle early this year.

The US central bank’s current wait-and-see approach is a signal for bond investors to tiptoe back into risk-taking, analysts said.

“We are overweight credit risk within our portfolios, getting risk back that we sold or removed in March and the beginning part of April given the uncertainty and tight valuations at that point in the economy,” said Vishal Khanduja, head of broad markets fixed income at Morgan Stanley Investment Management in Boston.

“Growth is slowing, but not slowing into recession levels. So this almost makes it a very ‘Goldilocks’ type of environment for fixed income, especially credit where you don’t see recession fears and balance sheets are very strong, both consumer and corporate.”

FADING WORRIES

Signs of easing anxiety have been in place in the bond market the last few weeks.

J.P. Morgan said in its latest Treasury survey as of a week ago that the percentage of all clients that are long duration relative to their benchmarks has increased to 30% from 26% in the previous week. Adding duration can reflect optimism that interest rates will fall.

Expressed in number of years, duration relates to how far a bond’s value will fall or rise when interest rates move. In general, when rates fall, higher-duration bonds experience a greater increase in value compared to those with lower duration.

In the credit market, spreads to Treasuries have also narrowed since blowing out the week after President Donald Trump’s April 2 “Liberation Day” tariff announcements that panicked markets with the prospect of trade wars that could exacerbate inflationary pressures.

The investment-grade bond spread stood at 78 basis points (bps) last Friday, the tightest since mid-November last year, and 1 bp shy of the lowest point of 77 bps hit in 1998, according to ICE BAML data. It had touched 121 bps, or the highest since November 2023, in the days after Liberation Day.

The high-yield spread also showed a similar recovery, showing 284 bps last Friday, down from 461 bps a week after Liberation day.

A narrower spread indicates that bond investors are demanding less additional yield to hold riskier corporate bonds over safer US Treasuries and reflects confidence about the US economy and corporate health.

Bond volatility has also been low, suggesting a stable economic environment for fixed income investors. As of last Friday, the ICE BofA MOVE index was 82.09, a two-week low.

“We are running our portfolio at lower levels of risk than our long-run averages,” said Dan Siluk, head of global short duration and liquidity at Janus Henderson Investors, but he clarified that caution remains because the firm has kept duration shorter.

“We’ve got more triple Bs (corporate bonds with a Triple B-rating), we’ve got high yield in the portfolio, but rather than owning a three-year, I’m going to own the one-year, he added. “And that means I’m turning the portfolio over more, but I’m looking for good opportunities.

Other bond investors are similarly cautious, but on the lookout for relative value.

“The quality of the portfolio is the highest it has ever been given all the uncertainty. So we have been more defensive. But we’re still deploying cash and we are looking for relative value opportunities,” said David Norris, a partner at TwentyFour Asset Management.

“We think markets are very frothy given the action in spreads.”

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Laura Matthews; Editing by Alden Bentley and Anna Driver)

Prices dip after EU trade deal, ahead of auctions

NEW YORK – US Treasuries slipped on Monday, pushing yields higher, as risk sentiment suggested more optimism about the global economic outlook after the United States and the European Union struck a trade agreement on Sunday that was received with mostly relief by investors.

It’s an event- and data-packed week starting with the Treasury’s refunding announcement on Wednesday. The US Treasury is widely expected to maintain current auction sizes for notes and bonds when it announces financing plans, and will likely keep them steady for some time.

Bond market participants are also bracing for Monday’s auctions of USD 69 billion in US two-year notes and USD 70 billion in five-year Treasuries. That has spurred some concession in the market, meaning investors are selling Treasuries ahead of the auction so they can buy them back later at a lower price.

The Treasury will also auction USD 82 billion in 13-week bills, and USD 73 billion in 26-week debt later on Monday. It has focused on issuing Treasury bills to rebuild its cash balance that has been depleted with a debt ceiling issue that was unresolved prior to President Donald Trump’s tax and spending legislation being signed into law on July 4.

But it has been the EU trade deal that has set the bond market on this risk-on path.

The agreement, announced on Sunday between two economies that account for almost a third of global trade, will see the US impose a 15% import tariff on most EU goods – half the threatened rate but much more than what Europeans hoped for.

The EU also pledged to make USD 750 billion in strategic purchases, covering oil, gas, nuclear, fuel and chips during Trump’s term, including up to USD 600 billion in US military equipment.

“The trade deal over the weekend was the first that investors can trade on. I don’t think anybody was really expecting that,” said Jim Barnes, director of fixed income, at Bryn Mawr Trust in Berwyn, Pennsylvania.

“The market has taken that on the positive side, with the equity market starting higher, bond yields trending up,” Barnes said adding that the deal has reduced some uncertainty in the market, spurring more growth.

In late morning trading, the benchmark 10-year yield was up 2.4 basis points (bps) at 4.409%, after posting last Friday its largest weekly decline in a month. US 30-year yields rose 2 bps to 4.947%. On Friday, 30-year yields posted their biggest weekly fall in two months.

The two-year yield, which reflects interest rate expectations, edged up 1.3 bps to 3.929%.

The Federal Reserve also meets this week in a two-day meeting. It is broadly expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range when its two-day meeting ends on Wednesday.

Ahead of the auction, US five-year yields were up 1.4 bps at 3.966%.

Analysts expect Monday’s sale of two-year and five-year notes to be well-received.

“All else being equal, we’d expect this reality to cheapen the front-end of the curve as an auction concession,” wrote BMO Capital Markets in a research note, referring to expectations that yields will fall after the auction.

The Treasury will also announce later on Monday borrowing estimates for the quarter. In the Treasury’s preliminary estimate in May, the department announced that it would borrow USD 554 billion for the third quarter. Analysts expect that figure to sharply increase.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski)

Is US stock rally near ‘Mag 7’ turning point?: McGeever

ORLANDO, Florida – As investors brace for the busiest week of the US earnings season, with four of the ‘Magnificent Seven’ tech giants reporting, debate is picking up again about these megacap firms’ influence over US equity indexes and whether we could be seeing the beginnings of true market broadening.

By some measures, this small clutch of tech titans’ profits, market cap, and valuations as a share of the wider market has never been bigger. Broader indices are at record highs, but strip out these firms and the picture is much less rosy.

Indeed, since the beginning of 2023, the S&P 500 composite – the benchmark ‘market cap’ index increasingly dominated by the ‘Mag 7’ – has gained 67%, more than double the ‘equal-weight’ index’s 32%.

Only two years ago, the S&P 500 composite/equal-weight ratio was 0.66, meaning the composite index was worth around two-thirds of the equal weight index. That ratio is now 0.84, the highest since 2003.

There’s good reason for that.

According to Larry Adam, chief investment officer at Raymond James, 12-month forward earnings estimates for the S&P 500 have outpaced estimates for the equal-weight index by 14%. And Tajinder Dhillon, senior research analyst at LSEG, notes that the ‘Mag 7’ last year accounted for 52% of overall earnings growth.

Many investors and analysts consider it unhealthy to have the fate of the entire market dependent on so few companies. It may be fine when they’re flying high, but not so much if one or two of them take a dive. Plus, it makes stock picking more difficult. If the market basically goes where the ‘Mag 7’ or Nvidia go, why should an investor bother buying anything else? That’s a recipe for market inefficiencies.

YACHTS AND ALL BOATS?

There have recently been nascent signs that the market may be broadening out beyond tech and AI-related names, largely thanks to positive news on the trade front. Last week, the equal-weight index eclipsed November’s high to set a fresh record.

Raymond James’s CIO Adam notes that the equal-weight index outperformed the S&P 500 last week for the fourth week in the last 13. More of the same this week would mark its first monthly outperformance since March.

Can it hit this mark? Around 160 of the S&P 500-listed firms report this week, including Meta and Microsoft on Wednesday and Amazon and Apple on Wednesday. It’s not a stretch to say these four reports will move the market more than the rest combined.

LSEG’s Dhillon says the Mag 7’s share of total earnings growth is expected to fall to 37% this year and 27% next year. The expected earnings growth spread between Mag 7 and the wider index in the second quarter – 16.4% vs. 7.7% – is the smallest since 2023, and will shrink more in Q3, he adds.

Larry Adam at Raymond James, however, thinks the recent market broadening is a “short-term normalization” rather than a “material shift”. He thinks the earnings strength of the tech-related sectors justifies the valuation premium on these stocks.

Regardless, what we know for sure is that fears about the market’s concentration and narrowness have been swirling for years and there has yet to be a reckoning. The equal-weight index’s rise to new highs last week suggests the rising tide is lifting all boats, not just the billionaires’ yachts.

Essentially, the Mag 7 and large caps are outperforming, but if you peel back the onion, other sectors like financials and industrials are also doing well. And look around the world. Many indices outside the US that aren’t tech-heavy are approaching or printing new highs also, like Britain’s FTSE 100 and Germany’s DAX.

“To see the largest names leading isn’t a worrisome sign, especially as they are backing it up with very strong earnings,” says Ryan Detrick, chief market strategist at Carson Group. “This isn’t a weak breadth market, it is broad based and a very healthy rally.”

This week’s earnings might go some way to determining whether this continues for a while yet.

(The opinions expressed here are those of the author, a columnist for Reuters)

(By Jamie McGeever; Editing by Chizu Nomiyama and Nia Williams)

Euro, US stock index futures climb after US-EU trade deal

Investors appeared to embrace news of a trade deal between the US and European Union on Sunday that is expected to bring clarity for companies and some certainty to markets ahead of US President Donald Trump’s Friday tariffs deadline.

The euro rose against the US dollar and was last up 0.15% at USD1.176. The currency also was up about 0.1% against the pound and 0.2% against the Japanese yen.

US stock index futures rose after resuming trading late Sunday, with S&P 500 e-minis last up 0.3% and Nasdaq futures up 0.4%. Nikkei futures also traded higher.

Trump and European Commission President Ursula von der Leyen on Sunday announced the deal, which imposes a 15% import tariff on most European Union goods, half the threatened rate.

The EU-US deal is similar to parts of the framework agreement the US clinched with
Japan last week, but it also leaves open questions, including tariff rates on spirits.

“It’s really in line with the Japan deal, and I assume investors will view it positively as they viewed the Japan deal,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“The reality is there will be higher tariffs, which may lead to more inflation, depending on how much of it is absorbed by the manufacturers and how much of it is passed on to consumers.”

Michael Brown, senior research strategist at Pepperstone in London, said: “For the euro, it removes that risk of a huge tariff and potentially getting towards trade embargo levels with the US”

Optimism over easing trade tensions broadly helped push US stocks to record highs last week and lifted European shares to their highest since early June.

“It is odd to think that a late July week in the middle of the summer could prove to be the most pivotal of the year. It has already started with a key trade deal with a major partner,” Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut, wrote in a note following the news.

Investors have been bracing for increased volatility heading into August 1, which the US has set as a deadline for raising levies on a broad swath of trading partners.

Trump’s April 2 “Liberation Day” announcement of sweeping global tariffs sent stocks plunging in the immediate aftermath, due to spiking fears about a recession that have since faded.

Holger Schmieding, chief economist at Berenberg Bank in London, said of the EU-US announcement: “The crippling uncertainty is largely over, the deal is bearable for the EU. Modestly good news for equity markets, that probably priced in most of it beforehand.

“But of course, the outcome is still bad relative to the situation that prevailed before Trump started his trade wars.”

The announcement came after Von der Leyen traveled to Scotland for talks with Trump to push a hard-fought deal over the line.

Von der Leyen said the 15% tariff applied “across the board,” including automobiles, semiconductors and pharmaceuticals. Trump said the deal also calls for USD750 billion of EU purchases of US energy in coming years and “hundreds of billions of dollars” of arms purchases.

“We will need to see how long the sides stick to the deal,” Eric Winograd, chief economist at investment management firm AllianceBernstein, said.

(Reporting by Lewis Krauskopf and Caroline Valetkevitch; additional reporting by Lucy Raitano in London, Matt Tracy in Washington DC and Karin Strohecker; editing by Alden Bentley, Edward Tobin, Amanda Cooper, Nick Zieminski and Marguerita Choy)

Global equity funds draw weekly inflows on trade deal optimism

Inflows into global equity funds picked up again in the week through July 23 as optimism over US trade deals, stronger than expected US economic reports and an encouraging start to the corporate earnings season boosted risk sentiment.

Global investors snapped up a net USD 8.71 billion worth of equity funds during the week, reversing a USD 4.4 billion net withdrawal in the prior week, data from LSEG Lipper showed.

The United States and Japan agreed a deal earlier this week which cut existing import tariffs on Japanese goods to a lower-than-threatened 15%. Investors were also hopeful about the prospects of the US and the European Union settling on US import tariffs of around 15%.

Investors took comfort from encouraging initial earnings reports as advanced AI chip maker TSMC posted a record profit and Gatorade owner PepsiCo upgraded its earnings forecasts.

Net European equity fund inflows reached an 11-week high of USD 8.79 billion, while Asian funds drew a net USD 1.17 billion. US equity funds lagged, although net outflows eased to USD 2.68 billion from about USD 11.67 billion the prior week.

The technology sector gained USD 1.61 billion, reversing the previous week’s USD 576 million net outflow. The financial and industrial sectors also saw USD 1.13 billion and USD 1.61 billion net additions, respectively.

Net purchases of global bond funds extended into a 14th week as they added USD 17.94 billion.

Investors pumped USD 4.14 billion into short-term bond funds, the largest amount in 13 weeks. Euro-denominated bond funds and high-yield funds attracted a net USD 3.89 billion and USD 2.51 billion, respectively.

Gold and precious metals commodity funds recorded a net USD 1.9 billion worth of purchases, the largest weekly figure since June 18.

Global money market funds drew a net USD 2.09 billion after about USD 21.78 billion of net sales a week ago.

Emerging markets saw a revival in buying interest with investors adding bond funds of USD 2.19 billion and equity funds of USD 250 million after net disposals of USD 1.14 billion and USD 155 million in the prior week, data for a combined 29,669 funds showed.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Kirsten Donovan)

Oil prices dip to settle at 3-week low on US and China economic concerns

Oil prices eased on Friday and settled at a three-week low as traders worried about negative economic news from the US and China and signs of growing supply.

Losses were limited by optimism US trade deals could boost global economic growth and oil demand in the future.

Brent crude futures fell 74 cents, or 1.1%, to settle at USD 68.44, while US West Texas Intermediate (WTI) crude fell 87 cents, or 1.3%, to settle at USD 65.16.

Those were the lowest settlement levels for Brent since July 4 and WTI since June 30.

For the week, Brent was down about 1% with WTI down about 3%.

European Commission President Ursula von der Leyen will meet US President Donald Trump on Sunday in Scotland. European Union officials and diplomats said they expected to reach a framework trade deal this weekend.

The euro zone economy has remained resilient to the pervasive uncertainty caused by a global trade war, a slew of data showed on Friday, even as European Central Bank policymakers appeared to temper market bets on no more rate cuts.

In the US, new orders for US-manufactured capital goods unexpectedly fell in June while shipments of those products increased moderately, suggesting business spending on equipment slowed considerably in the second quarter.

Trump said he had a good meeting with Federal Reserve Chair Jerome Powell and got the impression that the head of the US central bank might be ready to lower interest rates.

Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil.

In China, the world’s second-biggest economy, fiscal revenue dipped 0.3% in the first six months from a year earlier, the finance ministry said, maintaining the rate of decline seen between January and May.

Growing supplies

The US is preparing to allow partners of Venezuela’s state-run PDVSA, starting with US oil major Chevron, to operate with limitations in the sanctioned nation, sources said on Thursday.

That could boost Venezuelan oil exports by a little more than 200,000 barrels per day (bpd), news US refiners would welcome, as it would ease tightness in the heavier crude market, ING analysts wrote.

Iran said it would continue nuclear talks with European powers after “serious, frank, and detailed” conversations on Friday, the first such face-to-face meeting since Israel and the US bombed Iran last month.

Venezuela and Iran are members of the Organization of the Petroleum Exporting Countries (OPEC). Any deal that could increase the amount of oil either sanctioned country could export would boost the amount of crude available to global markets.

OPEC said the joint ministerial monitoring committee (JMMC) scheduled to convene on Monday does not hold decision-making authority over production levels.

Four OPEC+ delegates said an OPEC+ panel is unlikely to alter existing plans to raise oil output when it meets, noting the producer group is keen to recover market share while summer demand is helping to absorb the extra barrels. OPEC+ includes OPEC and allies like Russia.

In Russia, the world’s No. 2 crude producer behind the US, daily oil exports from its western ports are set to be around 1.77 million bpd in August, down from 1.93 million bpd in July’s plan, Reuters calculations based on data from two sources show.

In the US, energy firms this week cut the number of oil and natural gas rigs operating for the 12th time in 13 weeks, energy services firm Baker Hughes said in its closely followed report on Friday.

(Reporting by Scott DiSavino in New York, Robert Harvey in London, and Sudarshan Varadhan and Siyi Liu in Singapore. Editing by Kirsten Donovan, Emelia Sithole-Matarise and David Gregorio)

S&P 500 and Nasdaq notch record closes, lifted by Alphabet

The S&P 500 and the Nasdaq notched record high closes on Thursday as robust results from Google parent Alphabet fueled optimism about other heavyweight artificial intelligence stocks, while Tesla slumped after the electric vehicle maker’s results disappointed investors.

Alphabet rose 1% as the search giant’s results boosted confidence that heavy investment in a race to dominate AI technology is paying off.

Shares of Microsoft, Nvidia, and Amazon each climbed 1% or more.

The US-Japan trade deal and recent signs of progress in talks with the European Union also fueled Wall Street’s gains.

“Investors are feeling optimistic about trade negotiations, about the economy, the trend in inflation, as well as the better-than-expected Q2 earnings reports,” said Sam Stovall, chief investment strategist at CFRA Research.

Tesla tumbled 8.2% after CEO Elon Musk warned of a “few rough quarters” as the US government cuts support for electric vehicle makers. The stock has fallen around 25% so far in 2025.

UnitedHealth fell 4.8% after the insurer revealed it was cooperating with a Department of Justice probe into its Medicare practices, following reports of both criminal and civil investigations.

IBM dropped almost 8% after its second-quarter results fell flat with investors, hampered by disappointing sales in its core software division.

Honeywell fell 6.2% despite topping Wall Street’s expectations and raising its annual outlook.

The S&P 500 crept up 0.07% to end the session at 6,363.35 points. The Nasdaq gained 0.18% to 21,057.96 points, while the Dow Jones Industrial Average declined 0.70% to 44,693.91 points.

Volume on US exchanges was relatively heavy, with 19.9 billion shares traded, compared to an average of 17.8 billion shares over the previous 20 sessions.

Eight of the 11 S&P 500 sector indexes declined, led lower by consumer discretionary, down 1.23%, followed by a 0.75% loss in materials.

American Airlines tumbled nearly 10% after the carrier forecast a big third-quarter loss, hurt by sluggish domestic travel demand.

US President Donald Trump’s global trade war has created the biggest uncertainty for the airline industry since the COVID-19 pandemic.

Markets were also monitoring Trump’s planned visit to the Federal Reserve’s headquarters on Thursday, following months of the president criticizing Fed Chair Jerome Powell for interest rates that Trump views as too high.

With the Fed widely expected to hold rates steady at next week’s meeting, traders see a 60% chance of a September rate cut, according to CME’s FedWatch tool.

A US Labor Department report showed jobless claims last week fell to 217,000 – well below estimates – signaling continued resilience in the job market.

US business activity gained momentum in July, but companies hiked prices on goods and services, fueling economists’ predictions of faster inflation in the months ahead, largely driven by rising import tariffs.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio.

The S&P 500 posted 46 new highs and 6 new lows; the Nasdaq recorded 81 new highs and 44 new lows.

(Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru, and by Noel Randewich in San Francisco; Editing by Maju Samuel and David Gregorio)

Safe-haven gold slips as trade optimism lifts risk appetite

Gold prices fell for a second straight session on Thursday, as signs of easing global trade tensions dampened demand for safe-haven assets.

Spot gold was down 0.5% at USD 3,370.69 per ounce, by 01:45 p.m. ET (1745 GMT). US gold futures settled 0.7% lower at USD 3,373.5.

The market is optimistic about trade deals — first with the US and Japan, and now possibly the EU, said Aakash Doshi of State Street Investment Management, adding that strong equities and low volatility have weighed on gold’s upside.

The US and European Union were making progress toward a trade deal that may include a 15% baseline US tariff on EU goods, with potential exemptions. The move comes shortly after Washington unveiled a separate agreement with Japan.

Meanwhile, US President Donald Trump’s surprise move to visit the Federal Reserve later in the day added a layer of uncertainty to the policy outlook. It comes amid Trump’s repeated criticism of Fed Chair Jerome Powell for not cutting rates more aggressively.

“Any potential interference with Fed independence is supportive for gold over the medium to long term,” Doshi said.

The Fed is widely expected to leave rates unchanged at its July 29–30 meeting, but markets continue to price in a potential rate cut in September.

A safe-haven asset during times of economic uncertainties, gold also tends to do well in a low-interest rate environment.

On the data front, US jobless claims unexpectedly fell last week, signalling a steady labour market despite sluggish hiring making it harder for the unemployed to find work.

Spot silver slipped 0.7% to USD 39.02 per ounce, palladium dropped 3.5% to USD 1,234 and platinum lost 0.5% to USD 1,405.15.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Additional reporting by Sarah Qureshi in Bengaluru; Editing by Susan Fenton and Shailesh Kuber)

Asian shares, Aussie dollar climb on trade, earnings optimism

Shares in Asia rallied and the Australian dollar hit an eight-month high on Thursday as optimism over earnings and trade supported demand for higher yielding assets.

Tokyo’s broad Topix gauge of shares hit an all-time high, following new records on Wall Street overnight, after a trade pact between Japan and the US stoked speculation more deals would appear soon to head off sweeping tariffs. Nasdaq and S&P futures rose after results by Google parent Alphabet beat estimates to kick off the “Magnificent Seven” earnings season.

The US has also reached deals with the Philippines and Indonesia and an agreement with the European Union is also expected.

“Worst case concerns about tariffs in the US are probably dissipating to some degree at the moment, but nonetheless, tariffs are going up and that is a hurdle for consumers,” Brian Martin, ANZ’s head of G3 economics, said in a podcast.

The EU and US are closing in a trade deal that would impose 15% tariffs on European imports, while waiving duties on some items, according to officials from the European Commission. Meanwhile, Treasury Secretary Scott Bessent said US and Chinese officials will meet in Stockholm next week.

Second-quarter earnings season is underway in the US, with 23% of the companies in the S&P 500 having reported. Of those, 85% have beaten Wall Street expectations, according to LSEG data.

Results from Magnificent Seven members, whose results have powered indexes to previous peaks, are in the spotlight for guidance on spending and returns surrounding artificial intelligence (AI).

Alphabet strongly beat estimates and cited massive demand for its cloud computing services as it hiked its capital spending plans. But electric car maker Tesla posted its worst quarterly sales decline in more than a decade and profit that trailed analyst targets.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%. Japan’s Topix surged for a second day, rising 1.4% to surpass its previous all-time high reached last year.

The Australian dollar, a common proxy for risk sentiment, fetched USD 0.66, just off USD 0.6604 hit earlier, which was the highest since November 2024. The US dollar dropped 0.1% to 146.38.

US crude CLc1 climbed 0.4% to USD 65.5 a barrel. Spot gold was traded at USD 3,390.84 per ounce, up 0.1%.

In early trades, pan-region Euro Stoxx 50 futures shot up 1.3% at 5,435, while German DAX futures were up 1.3%.

US stock futures, the S&P 500, were up 0.13% and Nasdaq contracts climbed 0.4%.

(By Rocky Swift, Editing by Sam Holmes)

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