US stocks opened higher as investors awaited a new round of quarterly earnings and monitored the possibility of interest rate cuts. The S&P 500 and Nasdaq Composite rose, while the Dow Jones initially opened flat but later climbed. Investors are focused on corporate results, with Spotify and Eli Lilly showing strong performances, and are also paying attention to Fed speakers for insights on future policy.
US stock futures edged lower as investors digested Fed Chair Jerome Powell's cautious stance on policy, with the Dow Jones and S&P 500 futures slipping, while Nasdaq 100 futures traded flat. The market is awaiting corporate results to potentially boost stock gains, with Spotify and Eli Lilly's positive guidance already impacting premarket trading. Additionally, investors are monitoring Fed speakers for any divergence from Powell's policy path.
The US dollar strengthened to a near 1-week high against a basket of currencies as risk sentiment soured due to lackluster corporate results and rising US Treasury yields. Tech giant Alphabet's cloud division missing revenue estimates and the surge in US bond yields contributed to the decline in risk appetite. Meanwhile, benchmark US 10-year Treasury yields inched higher, nearing a 16-year peak. Analysts, however, see limited room for yields and the dollar to extend gains. The Australian dollar initially jumped on higher inflation readings but later erased gains, while the Canadian dollar weakened after the Bank of Canada forecasted weak growth and left the door open for more rate hikes. The Japanese yen remained near the 150 threshold, with pressure mounting on the Bank of Japan to change its bond yield control. Bitcoin also rose, fueled by speculation of an imminent exchange-traded bitcoin fund.
Japan's Nikkei share average surged to its highest level since August 1990, driven by strong corporate results, a weaker yen, and optimism over a US debt ceiling deal. The broader Topix also extended its climb to a post-bubble milestone. The rally was further fueled by foreign buying, increased investment by Warren Buffett, and a push for better corporate governance by the Tokyo Stock Exchange. However, some investors are concerned about the market overheating.
