Global Markets Mixed Ahead of U.S. Interest-Rate Decision

By Dow Jones Newswires Staff

Global markets were mixed ahead of the Federal Reserve's interest-rate decision later Wednesday where a 25 basis-point cut is widely expected, and ahead of more U.S. big-tech earnings. President Trump continues his tour of Asia and is due to meet Chinese leader Xi Jinping later this week, where the two will discuss a trade framework.

• U.S. futures for the S&P 500 and Nasdaq were up 0.3% and 0.5%, respectively, while the Dow Jones Industrial Average was flat after hitting record highs in yesterday's session. Stocks were boosted by the Nasdaq composite after Microsoft signed a deal with OpenAI, sending its shares 2% higher to close above $4 trillion for the first time. Alphabet, Microsoft and Meta are due to report earnings Wednesday.

• In Europe, most indexes were lower except London's FTSE 100 which was up 0.4%, lead by the mining and healthcare sectors. Germany's DAX, France's CAC 40 and the Stoxx 600 were down 0.05%, 0.1% and 0.01%, respectively. In London GSK shares were up 3.7% after raising its guidance on higher earnings while Glencore shares were up 6.3% after its third-quarter production report. Elsewhere Mercedes-Benz, BASF and Deutsche Bank shares were up 5.1%, 2.9% and 2.9%, respectively, after earnings.

• Asian shares closed higher on rising optimism that trade tensions between the U.S. and China will ease. President Trump, speaking in South Korea, said he expects to sign a trade deal with Chinese President Xi on Thursday. Japan's Nikkei closed 2.2% higher, led by chip maker stocks. South Korea's Kospi was up 1.8%, supported by chip makers, after SK Hynix posted record quarterly profits. In mainland markets, Shanghai closed 0.7% higher, rising above 4000 for the first time since 2015. The tech-heavy ChiNext rose 2.9%, while Shenzhen was 1.3% higher. Hong Kong's Hang Seng is closed due to a public holiday

• The dollar rose. The DXY dollar index was up 0.2% to 98.857.

• U.S. Treasury yields were little changed in Asian trade ahead of the Federal Reserve's rate decision. The Fed is set to cut its key interest rate by 25 bps at a time when official data isn't available due to the government shutdown. The two-year Treasury yield was up 0.2 bps at 3.495%, the 10-year yield was down 0.4 bps at 3.978% and the 30-year yield fell 0.6 bps to 4.540%, according to Tradeweb.

• Eurozone government bond yields were marginally higher in early trading as central bank meetings come into focus. Wednesday's data schedule is unlikely to provide fundamental impulses to trade on, leaving the Fed's rate decision the key focus point of the day, Commerzbank Research's Hauke Siemssen. Meanwhile, the European Central Bank is all but certain to leave interest rates unchanged on Thursday. In the eurozone, Germany will auction August 2035 Bunds. The 10-year Bund yield traded 0.4 bps higher at 2.624%, according to Tradeweb data.

• Bitcoin edged higher on signs of easing U.S.-China tensions and the prospect of the Federal Reserve cutting interest rates further. "We expect the two leaders to strike a deal to ease tensions, however, failure to reach an agreement could trigger a negative reaction in risk markets," Danske Bank analysts say in a note. Bitcoin rose 0.6% to $113,558, LSEG data show.

• Oil prices were on track for a monthly loss despite optimism surrounding U.S.-China trade talks and reports of a U.S. crude stockpiles draw last week. Brent crude fell 0.5% to $63.53 a barrel, while WTI was down 0.5% to $59.84 a barrel, respectively. "Prices remain under pressure heading toward a third monthly drop, driven by expectations of a global surplus as OPEC+ prepares to raise output at its upcoming meeting," Soojin Kim at MUFG said.

• Gold futures rebounded in early trade, rising back above the $4,000 mark. Futures in New York gained 1% to $4,023.30 a troy ounce. The precious metal remains up more than 50% this year, supported by central-bank buying and investors rushing to safe-haven assets as a hedge against geopolitical and economic uncertainty. Meanwhile, silver futures rose 1.8% to $48.18 an ounce.

Write to Barcelona Editors at barcelonaeditors@dowjones.com