Global Markets Hold Ground as Earnings Roll In and Trade Uncertainty Looms

On Tuesday, global markets showed signs of stabilization despite corporate profits being impacted by persistent trade uncertainties.

Initially in Europe, U.S. stock futures showed gains, Asian stock markets concluded with increases, and both the dollar and Treasury yields stabilized. The majority of European markets started off on an upward trend.

— U.S. stock futures for the Dow Jones Industrial Average rose by 0.14%, S&P futures increased by 0.18%, and Nasdaq futures went up by 0.22%.

— In Europe, the Stoxx Europe 600 gained 0.2% during early trade following several company reports. The FTSE 100 remained relatively unchanged, whereas Germany’s DAX increased by 0.6%. Notable changes were seen with BP declining by 3.8%, and Porsche dropping almost 6% due to a profit alert; however, Rheinmetall stock saw an increase of approximately 6%.

- Asian stock markets showed varied performance. The Shanghai Composite Index declined by 0.1%, despite indications from China of potentially easing its tariff position following statements supporting regular commercial dealings with U.S companies. Meanwhile, South Korea’s Kospi index concluded trading at an increase of 0.65%, and Australia’s S&P/ASX 200 benchmark rose by 0.9%. Japanese financial markets remained shuttered due to observance of the Showa Day national holiday.

— Despite lingering exposure to trade-related uncertainties, the U.S. dollar showed a slight increase. The Dollar Index (DXY), which measures the greenback’s strength relative to a group of key foreign currencies, climbed by 0.2% to reach 99.1730. Data from LSEG indicated that both the two-year and ten-year Treasury yield rates remained steady at 3.686% and 4.205%, respectively.

—The Canadian dollar declined slightly following the victory of the Liberal Party in Canada for a fourth consecutive term; however, they seem to lack a parliamentary majority. This minor depreciation is probably because "the Liberals will require backing from minor parties to implement their policies in Parliament," as noted by Commerzbank’s Michael Pfister in his report. Meanwhile, the U.S. dollar has risen marginally to stand at 1.3836 Canadian dollars.

— Oil prices continued their decline from the prior day’s trading session; Brent crude and WTI each dropped 1.3%, reaching $63.95 and $61.20 per barrel, respectively.

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