By Lars Mucklejohn
The latest updates on the FTSE 100 and London’s financial markets from City A.M.’s newsroom in the heart of the City of London.
Wall Street wrapped up the worst month since September with the Dow Jones Industrial Average dropping by 1.49 per cent to 37,815.92, the S&P 500 losing 1.57 per cent to 5,035.69, and the Nasdaq Composite declining by 2.04 per cent to 15,657.82.
All 11 sectors within the S&P 500 saw declines, particularly in energy, consumer discretionary, materials, industrials, and technology.
Major companies including Tesla, Alphabet, Nvidia, Microsoft, and Amazon all ended lower, except for Amazon, which saw a 3.1 per cent increase in after-hours trading after reporting better-than-expected first-quarter results.
In Asia, Japan’s Topix index fell 0.8 per cent, mainly due to semiconductor sector losses, notably Tokyo Electron Device. South Korea’s Kospi index rose slightly by 0.2 per cent.
The yen weakened against the offshore renminbi and the dollar, settling at ¥157.82 after a turbulent week.
Hong Kong’s market was closed for Labor Day, and mainland Chinese markets remained shut all week. In Asia and Europe, markets closed for Labor Day.
Oil prices fell for the third day due to rising US inventories, production, amid hopes for a Middle East ceasefire. Brent crude for July dropped to $85.62, while US West Texas Intermediate for June fell to $81.14.
Gold prices held steady as investors awaited the US Federal Reserve’s policy decision on interest rates. Spot gold remained unchanged at $2,288.14 per ounce, rebounding slightly from its lowest level since April 5.
AMD’s conservative revenue forecast for the current quarter falls in line with expectations, with sales and profits from the previous quarter slightly surpassing forecasts. However, the company’s stock dropped nearly seven per cent in after-hours trading.
Meanwhile, Super Micro Computer raised its full-year sales outlook, anticipating increased demand for AI chips. Despite a 200 per cent revenue surge in the latest quarter, the stock plummeted over 10 per cent in post-market trading despite a significant year-to-date increase.
Starbucks reported weaker quarterly results due to a sales decline in China, leading to a 10 per cent drop in after-hours trading. Globally, comparable store sales fell by 4 per cent, with China experiencing an 11 per cent decline due to reduced spending and transactions.
Japan’s factory activity improved slightly in April, as indicated by the final au Jibun Bank Japan manufacturing PMI, which rose to 49.6 from March’s 48.2, just below the initial estimate of 49.9. Despite remaining below the expansion threshold of 50.0, it marked the slowest contraction in eight months.
The financial world is eagerly awaiting the US Federal Reserve’s decision on interest rates, expected later today. The consensus suggests the Fed will likely maintain its current stance due to slower-than-expected inflation decline.
Some economists speculate a potential rate cut after the US presidential election in November.
All attention will be on Fed Chair Jay Powell’s post-meeting press conference for insights.
Economic data, including US employment figures and international manufacturing PMI comparisons, are forthcoming.
In the UK, Nationwide will release its April house price index. No major releases are scheduled in Europe.
Additionally, companies like DoorDash, Mastercard, and Qualcomm are set to report quarterly earnings.
