Wall Street Ticks Higher in Premarket as Markets Digest Another Big Batch of Corporate Earnings

Economic

Summary:

Wall Street edged higher as investors weighed strong earnings from McDonald’s and Uber against ongoing concerns over Trump-era tariffs and slowing economic data, while expectations for a Fed rate cut continue to build.

Markets on Wall Street ticked up modestly Wednesday as investors pored over a slew of earnings reports to assess how companies have been affected by U.S. President Donald Trump’s tariffs.

Futures for the S&P 500 were up 0.2% while futures for the Dow Jones Industrial Average gained 0.3%. Nasdaq futures rose 0.2%.

McDonald’s rose close to 4% in early trading after the fast food giant beat Wall Street’s second-quarter sales and profit targets, boosted by its “Minecraft”-themed meal promotion and an unexpectedly strong jump in same-store sales.

McDonald’s better-than-forecast results come after rivals like Yum Brands, the parent company of KFC, Taco Bell and Pizza Hut, missed revenue targets as same store sales declined 5% in the U.S. Last month, Chipotle lowered its full-year same-store sales guidance after a disappointing second quarter that saw same-store sales fall 4%.

Disney fell 2% before the bell even after the entertainment company’s profit and revenue climbed in its fiscal third quarter as it continued to add subscribers to its streaming service and saw a strong performance at its domestic theme parks.

Last night, the NFL announced that it had entered into a nonbinding agreement with Disney-owned ESPN, which will give the sports broadcaster the NFL Network, NFL Fantasy and the rights to distribute the RedZone channel. The NFL will get a 10% equity stake in ESPN in the proposed deal.

Shares of the ride-hailing and delivery service Uber rose 1.6% after it beat analysts’ sales and profit targets. The company, whose shares are up more than 40% this year, also announced a $20 billion stock buyback.

Reporting after the bell on Wednesday are DoorDash and Airbnb.

Stocks closed modestly lower Tuesday after a weaker-than-expected report on activity for U.S. businesses in services industries like transportation and retail added to worries that Trump’s tariffs may be hurting the U.S. economy. Conversely, such indicators raise hopes the Federal Reserve may cut interest rates before the end of the year.

Companies have been under pressure to report bigger profits after the U.S. stock market surged to record after record from a low point in April. The big rally fueled criticism that the broad market had become too expensive.

For stock prices to look like better bargains, companies could produce bigger profits, or interest rates could fall. The latter may happen in September, when the Fed has its next policy meeting.

Expectations have built sharply for a rate cut at that meeting since a report on the U.S. job market on Friday came in much weaker than economists expected. Lower interest rates would make stocks look less expensive, while also giving the overall economy a boost. The potential downside is that they could push inflation higher.

Elsewhere, in Europe at midday, France’s CAC 40 added 0.3%, Germany’s DAX edged up 0.1% and Britain’s FTSE 100 gained 0.2%.

Among Japanese companies reporting financial results on Wednesday, automaker Honda Motor Co. said its profit declined to about half the level of a year earlier despite strong sales in North America. Toyota Motor Corp. and electronics and entertainment company Sony Corp. report their results later this week.

In Asian trading, Japan’s benchmark Nikkei 225 rose 0.6% to finish at 40,794.86. Australia’s S&P/ASX 200 added 0.8% to 8,843.70. South Korea’s Kospi was little changed, gaining less than 0.1% to 3,198.14.

Hong Kong’s Hang Seng rose less than 0.1% to 24,910.63, while the Shanghai Composite gained 0.5% to 3,633.99.

In energy trading, benchmark U.S. crude rose 97 cents to $66.13 a barrel. Brent crude, the international standard, added 98 cents to $68.62 a barrel.

In currency trading, the U.S. dollar slipped to 147.53 Japanese yen from 147.61 yen. The euro cost $1.1605, up from $1.1579.

Source: AP

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ING

Commodity

Forex

Energy – Secondary tariff uncertainty lingers

There’s still plenty of uncertainty over the US imposing secondary tariffs on buyers of Russian oil. Much of the noise in recent weeks has centred on India facing such tariffs. However, market chatter is growing that China’s purchases of Russian oil may come into focus next. If India were to stop buying Russian oil amid tariff threats, we believe the market would be able to cope with the loss of this supply. It would wipe out the surplus we’re expecting in the market through the latter part of this year and much of 2026. This would leave some upside to prices, but a manageable one.

The bigger risk is if other buyers also start to shun Russian oil. This would require OPEC to tap into its spare production capacity quickly and aggressively to balance the market. This could result in significant further upside for prices. However, the key question remains whether India and China would actually stop purchasing Russian oil. If we cast our minds back to 2022, the expectation was that Russian oil flows would fall significantly following the start of the Russia-Ukraine war. Yet volumes held up well, with barrels rerouted to new destinations. Volumes continue to hold up well, despite the gradual tightening of sanctions against Russia.

We should get more clarity later this week, with President Trump’s deadline for Russia to strike a deal with Ukraine on Friday. There’s a US delegation visiting Russia this week. Reports are that President Putin may be willing to offer some concessions, such as an air truce, in order to avoid stricter sanctions and secondary tariffs.

US inventory data from the American Petroleum Institute overnight was supportive, showing that crude oil inventories fell by 4.2m barrels over the last week. Meanwhile, gasoline stocks fell by 900k barrels and distillate stocks increased by 1.6m barrels. If US Energy Information Administration (EIA) data today confirms a build in distillate stocks, it would be the fourth consecutive week of increases. This would ease concerns over tightness in the middle distillate market.

Metals - Central banks buy more gold in June

Central banks added a net 22 tonnes of gold to global reserves in June, according to the World Gold Council. The Central Bank of Uzbekistan was the leading buyer with net purchases of 9 tonnes, breaking a four month selling streak.In the second quarter, central banks added 166 tonnes to global official gold reserves. The National Bank of Poland was the largest buyer of gold, adding 19 tonnes to its reserves. This was lower than its first-quarter buying of 49 tonnes. Polish official gold holdings now total 515 tonnes, or 22% of total reserves.

However, Q2 buying was 33% lower quarter on quarter. This marks the second consecutive quarter during which demand has slowed, with gold’s 30% price rally this year likely contributing to the move. Despite the slowdown, central banks are likely to continue adding gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the US dollar.

Source: ING

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Glendon

Cryptocurrency

In the past 15 days, both major Bitcoin holders (over 10,000 BTC) and small investors (under 1 BTC) have been quietly adding to their positions. This trend highlights a common behavior across opposite ends of the investor spectrum: buying the dip.

Such accumulation during price corrections often signals underlying confidence in the long-term value of Bitcoin. Ultra-large holders, often referred to as “whales,” typically act with strategic intent, while retail investors may be driven by optimism and fear of missing out (FOMO). When both segments align in behavior, it often adds credibility to the market’s underlying strength.

A Lagging Indicator, But Telling

The data is based on a 15-day smoothed average, meaning it’s not showing real-time sentiment but rather a broader, more stable view of behavior. While this makes the signal less reactive to short-term moves, it also reduces noise and highlights genuine trends.

This lagging signal reveals that investors continued to buy during and after the recent dip, suggesting that the correction was seen more as an opportunity than a risk. If this trend continues, it could contribute to a solid base for Bitcoin’s next upward move.

Both ultra-large holders (>10K $BTC) and retail investors (<1 $BTC) have, on average, accumulated over the past 15 days. This suggests initial dip-buying during the recent correction. However, the signal is lagging, reflecting smoothed behavior over a 15-day window.

Growing Confidence in Bitcoin’s Future

Despite the short-term volatility, accumulation from both ends of the market signals growing confidence in Bitcoin’s long-term potential. Whether it’s strategic moves by whales or consistent purchases by retail users, the ongoing buy activity suggests a shared belief in Bitcoin’s value.

As market sentiment steadies and new catalysts emerge, this kind of grassroots and institutional support could become a powerful force in driving the next phase of the crypto cycle.

Source: CryptoSlate

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Warren Takunda

Economic

It looks like it wants to rise into key resistance at 1.08: zooming out a bit, we are still caught in a relatively tight consolidation phase, common to all Franc exchange rates, that shows 1.08 is the top of the range and 1.0666 the bottom.

At this stage, a breakout above 1.08 would require a significant impulse, and in this regard we are watching the ongoing Swiss-U.S. negotiations closely as failure to secure a deal could provide that impulse.

Risks Build For Swiss Franc, Tilting GBP/CHF Higher_1

Above: GBP/CHF at daily intervals.

Such an outcome could trigger the weakness that many CHF buyers have long been looking for.

Failure to reach a deal will harm Swiss exports, a major leg of CHF strength over the long term.

"The U.S. remains Switzerland's largest single-country export destination and a significant drop in receipts presents a case for significant derating of the currency," said a note out Monday from Bank of New York.

For now, the market senses that a deal will be done, which would limit any major GBP/CHF upside.

However, analysts at Bank of America warn on Wednesday: "The market appears to be complacent, believing that a deal will be struck in line with precedent of other negotiations. We see risks in this view - there have been no indications that the US is willing to concede."

The Franc is a safe-haven, meaning it also tends to appreciate during time of market stress and fall during calmer conditions. However, failure to reach a Swiss-U.S. deal is probably not going to trigger the kind of negative market reaction that would bolster CHF.

This is because it is a relatively isolated case of a small country not being able to reach a deal, while the majority of the world's major economies have reached deals. Broader market contagion risks are therefore low.

This makes failure to reach a deal a genuine idiosyncratic risk for the Franc.

Even if a new accord is reached, global markets could continue to steadily rise during August, which also helps GBP/CHF higher.

Big risks to this view include a Swiss-U.S. trade deal triggering an unwinding of CHF risk premium, pushing GBP/CHF lower. For now, we don't think the move would be massive.

A more significant risk for GBP/CHF would be U.S. inflation expectations surging, which would boost the CHF store of value status (it acts like gold in this regard).

And remember: the bigger, multi-year trend of CHF appreciation is intact, meaning that ultimately, over a multi-month timeframe, the Franc should test new highs.

Source: Poundsterlinglive

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Michelle

Economic

Forex

The dollar stuck to its recent trading range on Wednesday, with investors choosing to stay on the sidelines after another round of weak U.S. data and as PresidentDonald Trumpprepared to fill a coming vacancy on the Federal Reserve's Board of Governors.

Trump said on Tuesday he will decide on a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week and had separately narrowed the possible replacements for Fed Chair Jerome Powell to a short list of four.

Data on the same day showed the U.S. services sector activity unexpectedly flatlined in July while input costs climbed by the most in nearly three years, underscoring the hit fromTrump's tariffson the economy, which have also begun to bite corporate earnings.

Still, traders were hesitant to take on fresh positions ahead of the Fed developments. Concerns are mounting that partisan loyalty could invade the staid world of central bank policy.

The dollar was last flat against the yenat 147.55, while the euroedged up 0.3% to $1.16065. Sterlingreversed earlier losses to trade up 0.1% at $1.3324.

"Trump’s open attacks on the Bureau of Labor Statistics over payroll revisions have not had muchmarket impact, but it will be interesting to see whether the selected Fed chair candidate echoes that narrative. If so, it could ignite fears of a disconnect between Fed policy and official data - a scenario we see as decidedly dollar-negative," ING strategist Francesco Pesole said in a note.

TREASURY YIELDS RISE

While moves in the dollar have been more subdued this week, the currency has yet to recover from its steep losses on Friday, when it clocked its largest one-day percentage fall in nearly four months following an alarming jobs report.

Trump fired BLS commissioner Erika McEntarfer last week, after the July employment report.

Against a basket of currencies, the dollar dipped 0.2% to 98.547, some way off Friday's peak of 100.25 hit before the nonfarm payrolls figures.

Traders continue to price in a 91% chance of a Fed rate cut in September, with about 58 basis points worth of easing expected by the year-end. (0#USDIRPR)

But data such as Tuesday's services ISM report underscore the fine line the Fed has to tread, as policymakers weigh rising price pressures fromTrump's tariffsagainst signs of a weakening U.S. economy.

"The services ISM has obviously got that kind of stagflationary whiff about it ... that's obviously a bit of a two-edged sword in terms of what does that mean for policy," said Ray Attrill, head of FX research at National Australia Bank.

"At the moment, I think we're sort of the view that maybe there's a bit too much confidence in the market about the certainty of a September move."

U.S. Treasury yields rose, leaving the 10-year note up 4.2 basis points on the day at 4.238% and two-year notes up 2 bps at 3.74%, after a $58 billion auction of 3-year notes (US3YT=RR), which was seen as somewhat soft by analysts, with demand equivalent to 2.53 times the notes on sale.

More supply hits the market this week with $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday.

Among other currencies, the Australianand New Zealand dollarsboth rose 0.6% to $0.6506 and $0.5933, respectively.

Source: TradingView

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JanusHenderson

Economic

Political

Head of Global Asset Allocation Ashwin Alankar explains how his concerns about premature policy accommodation unleashing a second wave of inflation have grown due to the risks posed by tariffs.

We are not implying that the renowned Spanish philosopher was specifically speaking about monetary policy in 2025 when he penned the statement above, but given the unfolding economic environment, it could be seen as a heads up to the Federal Reserve (Fed).Ever since the federal funds rate reached 5.50% in response to generationally high inflation, we’ve expressed concern about the risk of policy error should the U.S. central bank blink by prematurely easing policy before the inflation threat is fully vanquished. As seen in the chart below, this is what occurred during the 1970s when the Arthur Burns-led Fed – either through miscalculation or losing its nerve – lowered rates before the job was done, thus unleashing a second, even more fierce, inflationary wave.

Tariffs, inflation and the long shadow of policy error_1

Source: Bloomberg, Janus Henderson Investors, as of 18 July 2025. Note: The Atlanta Fed’s designation of “sticky” inflation are those categories whose price levels are slow to change based on their frequency of price adjustments.

As far back as mid-2022, we have identified policy error as a tail risk that could potentially upend the trajectory of a surprisingly extended economic cycle. Importantly, this was before the threat of tariff-related supply distortions emerged. It was also before rumors began circulating about President Trump potentially replacing Fed Chair Jerome Powell with a more dovish successor. These developments – should they unfold in the least favorable manner – would likely make a left-tail, or downside, outcome all the more costly.

What’s at stake

Significant progress has been achieved in the Fed’s battle against inflation once they recognized, and corrected, their transitory blunder. But while headline inflation as measured by the Consumer Price Index (CPI) stands at 2.7%, sticky inflation – an amalgamation of categories that change slowly and account for roughly 70% of CPI – resides at a more worrisome 3.3%.

Within this context, the argument that the fed funds rate – at 4.5% – has considerable room to drop becomes more tenuous. Based on sticky inflation, the fed funds rate is already within striking distance of the level of inflation that matters. Targeting the lower – and noisier – headline could lead to consumer prices ricocheting, resulting in the second major miscalculation of this cycle.

An untimely convergence

The pandemic-era inflationary surge was ignited by supply-chain disruptions and then exacerbated by massive fiscal stimulus. The previously unforeseen impetus for a second wave of inflation could be supply disruptions brought forth by Trump’s trade war.

Meanwhile, a more dovish Fed in 2026 could release a credit impulse in the form of lower rates, potentially spurring demand even as global supply chains and pricing remain in flux. It should be noted that the Fed is governed by a committee, and switching chairs may not result in greater accommodation. But the rhetorical assault on the U.S. central bank is hard to ignore. The potential convergence of supply and demand pressures means both the kindling and matches necessary for a second wave are in place.

An error-driven second wave would back the Fed into a corner with no good choices. Keeping policy accommodative – for whatever the reason – would likely cement inflation expectations at unwanted levels, distorting the important mechanism of price signals across the economy. It would also destroy the Fed’s credibility. The lone alternative would be for the Fed to raise rates – as it was forced to do in the late 1970s and early 1980s – to levels that would almost certainly cause a steep economic downturn.

Source:Janus Henderson

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Glendon

Economic

Bond

Euro zone government bond yields were set to break a three-day losing streak on Wednesday, taking cues from U.S. Treasuries, while traders continued to price in a 90% chance of a European Central Bank rate cut by March 2026.

U.S. yields fell sharply on Friday after weaker-than-expected jobs data triggered a strong dovish repricing of Federal Reserve monetary cycle. They edged higher on Tuesday, even as economic data pointed to stalling activity in the services sector.

Germany's 10-year bond yield (DE10YT=RR), the benchmark for the euro zone, rose 2.5 basis points (bps) to 2.65%.

Benchmark 10-year U.S. yieldwas up 4 bps at 4.24% in London trade.

The yield gap between U.S. and German 10-year government bonds (DE10US10=RR) was at 159 bops after hitting 153.3 last week, its lowest level since early April.

“A stalling U.S. economy should lead to further Treasury outperformance and a smaller growth differential between the US and the euro area,” said Reinout De Bock, rate strategist at UBS, adding that he has a 135 basis point target.

“What could also help the trade, is that the bar for a September cut by the ECB seems high.”

Money markets priced in an around 60% chance of a rate cut by year-end (EURESTECBM3X4=ICAP) and an 80% chance of the same move by March 2026 (EURESTECBM5X6=ICAP).

Traders are pricing in a 90% probability of a 25-bp rate cut by the Fed in September, and a total of 125 bps of easing by October 2026.

“Given the inflation backdrop the Fed is in a tough spot. More evidence of labour market weakness is required for a move, but I guess that is what markets will possibly bet on now,” said Chris Iggo, CIO at AXA Core Investments.

“I sense expectations have changed on the U.S. economy’s near-term outlook. Recession risks have increased.”

Germany's two-year yield (DE2YT=RR) rose 1.5 bps at 1.91%.

Italy’s 10-year yieldrose 3 bps to 3.48%, with the spread versus Bunds to 82.5 bps. It hit 81.44 on Tuesday, its lowest since April 2010.

Analysts argued that with the ECB easing cycle close to an end, the air for a further BTP-Bund spread compression will probably become thinner after the summer.

They recalled that some technical factors could also fade. Positive ratings kicked off the tightening, but declining volatility favouring carry trades and lower supply over the summer have helped to extend the rally.