Microsoft & Meta earnings due as Fed decision looms

Markets are focused on earnings from Microsoft and Meta, both reporting later today, alongside the Federal Reserve’s interest rate decision. The Japanese yen rose 0.4% and the Swiss franc gained 0.3% after an 8.8 magnitude earthquake off Russia's Far East triggered tsunami alerts across the Pacific. European equities were broadly higher, with the euro up 0.2% as investors weighed the EU's trade agreement with the U.S. ahead of President Trump’s August 1 tariff deadline.

Equities

The FTSE 100 rose 0.6% on Tuesday, supported by gains in healthcare and banking shares. AstraZeneca climbed 3.4% after posting second-quarter results that beat expectations for both profit and revenue. Management highlighted strong sales across its oncology and rare disease drugs, boosting investor confidence.

Games Workshop rose 5.4% after announcing a 30% rise in annual pre-tax profit, driven by continued growth in its Warhammer franchise. Barclays gained 2.8% after reporting a 23% jump in first-half profit, helped by growth in its investment banking arm and a better-than-expected performance in UK retail banking.

Elsewhere, performance among midcap stocks was weaker. The FTSE 250 fell 0.7%, weighed down by falls in Inchcape and Greggs. Inchcape dropped 11.7% after it reported a 4% decline in adjusted pre-tax profit for the first half, citing currency pressure and a slowdown in car demand in some regions.

Greggs slipped 4.7% as it reported a 14% fall in first-half profit, despite rising sales. Chemical company Croda International lost 10.4% after falling short of first-half sales estimates, pulling down the broader chemical sector.

In the US, major indices closed lower as investors reacted to a series of earnings reports from large-cap companies. The S&P 500 dropped 0.3%, the Dow fell 0.46%, and the Nasdaq was down 0.38%. UnitedHealth led losses on the Dow, falling 7.5% after the insurer forecast full-year profits below expectations.

Boeing declined 4.4% despite narrowing its second-quarter loss, as investors focused on ongoing production and delivery issues. Merck slipped 1.7% after confirming that shipments of its Gardasil HPV vaccine to China would remain paused through the end of 2025 due to weak demand.

Whirlpool plunged 13.4% after it cut its full-year earnings forecast and dividend, citing competitive pressure from rivals who increased imports ahead of expected US tariffs. UPS dropped 10.6% as it declined again to issue full-year guidance, with ongoing concerns about trade policy affecting demand.

Procter & Gamble lost 0.3% after saying it would raise prices on some goods to offset higher tariff-related costs, and also issued annual guidance below forecasts.

Forex & Commodities

The dollar held close to a one-month high on Wednesday ahead of the Federal Reserve’s interest rate decision. The dollar index was steady at 98.82 and on track for its first monthly rise of 2025. The euro edged up slightly to $1.1555 but remains down 1.9% in July, its first monthly decline this year after six consecutive gains. Sterling was at $1.3355, with no major reaction to recent political developments or data. The yen strengthened 0.4% to 147.85 per dollar following a tsunami alert triggered by a major earthquake off the Russian coast, which led to evacuation warnings along Japan’s east coast.

Attention now turns to central bank meetings, with the U.S. Federal Reserve expected to leave interest rates unchanged later today. However, comments from Chair Jerome Powell will be closely watched, especially as President Trump continues to push for rate cuts. There is speculation that Governor Christopher Waller and Vice Chair Michelle Bowman—both Trump appointees—could dissent if the Fed holds rates steady again. The Bank of Japan will meet on Thursday, with investors looking for signals on possible rate rises after Japan’s recent trade agreement with the U.S.

In commodities, gold was flat at $3,324.46 per ounce, supported by lower U.S. Treasury yields and a softer dollar. Analysts say a rise above $3,350 this week could signal short-term upside, especially with key U.S. inflation and employment data ahead. Oil prices paused after a strong rally. Brent crude was up 8 cents at $71.81, while WTI gained the same to trade at $69.29. Markets are watching closely after Trump shortened his deadline for Russia to end the war in Ukraine to 10–12 days, threatening 100% secondary tariffs on partners who continue to trade with Moscow.