Global Markets Mixed Amid Earnings Reports, Trade Jitters

Wednesday’s financial markets presented a mixed picture as traders digested a fresh batch of corporate earnings reports against a backdrop of persistent uncertainty surrounding US trade policies under President Donald Trump. Divergent results from major companies highlighted the uneven economic landscape.

US Markets React to Earnings and Trade Jitters

Early indications pointed towards caution, with S&P 500 (SPY) futures dipping 0.3% and Nasdaq (QQQ) futures declining 0.5% before the opening bell. Conversely, Dow Jones Industrial Average (DIA) futures saw a modest gain of 0.1%.

Corporate Performance Highlights

The corporate earnings season delivered contrasting news:

* Starbucks (SBUX) saw its shares fall sharply by approximately 9% in pre-market trading. This followed the release of second-quarter results that missed analyst expectations for both sales and profits. While the coffee chain noted its first quarterly traffic increase in over a year, it acknowledged that a full recovery remains distant.
* Visa (V) shares, however, edged slightly higher after the company reported earnings that surpassed market forecasts. Visa emphasized the resilience of consumer spending, despite recent surveys indicating growing unease about the potential impact of tariffs.

Investors are also looking ahead to upcoming quarterly reports from technology giants Microsoft (MSFT) and Facebook’s parent company, Meta (META).

Tariff Worries and Economic Indicators

Concerns about the Trump administration’s trade policies continue to weigh on sentiment. Business leaders have expressed uncertainty about their ability to sustain earnings momentum amidst the ambiguity surrounding tariffs. Many investors worry that these tariffs could impede global trade, increase prices for essential goods, and potentially trigger a recession, thereby impacting markets and consumer purchasing power.

Later today, the US government is scheduled to release its initial estimate for first-quarter Gross Domestic Product (GDP). Economists widely anticipate a slowdown in growth to below 1%, a significant drop from the 2.4% recorded in the previous quarter. Additionally, the release of the consumer spending report, which contains the Federal Reserve’s preferred inflation measure, is highly anticipated.

European Markets Show Resilience

Despite external pressures, particularly from US tariffs impacting exports, the Eurozone demonstrated resilience. The region’s economy grew by 0.4% in the first quarter, outpacing the growth seen at the end of 2024.

In Germany, the DAX index climbed 0.7% following approval by the Social Democrats of a coalition agreement, paving the way for Friedrich Merz to potentially become the next Chancellor. France’s CAC 40 also registered a 0.7% gain, while the UK’s FTSE 100 added 0.2%.

Asian Markets Navigate Mixed Signals

Trading across Asia was varied:

* In Tokyo, the Nikkei 225 index rose 0.6%. Automotive stocks showed mixed performance after President Trump announced a relaxation of certain tariffs on vehicles and auto parts. Toyota (TM) shares fell 1.6%, Honda (HMC) gained 0.4%, and Nissan saw a minor decline of 0.2%.
* Hong Kong’s Hang Seng index increased by 0.5%.
* The Shanghai Composite index edged down 0.2%, influenced by reports indicating a drop in April export orders due to new tariffs.
* South Korea’s Kospi decreased by 0.3%, while Australia’s S&P/ASX 200 gained 0.7%. Taiwan’s Taiex index advanced by 1%.

Commodities and Currencies Update

In energy markets, West Texas Intermediate (WTI) crude oil slipped 45 cents to $59.97 per barrel. Brent crude, the international benchmark, decreased by 43 cents to $62.85 per barrel.

In foreign exchange, the US dollar strengthened against the Japanese yen, rising to 142.93 yen from 142.35 yen. The euro experienced a slight pullback against the dollar, trading at $1.1379 compared to $1.1386 previously.