Chipmaker Samsung Electronics said its operating profit jumped 19-fold to a record in the second quarter, helping lift beaten-down investor sentiment.
Earnings reports from mega caps Meta and Microsoft underscored sharply contrasting fortunes for companies racing to build AI infrastructure.
Microsoft reassured investors it would continue generating cash through fiscal 2027 despite heavy spending, sending its shares higher, while Meta’s stock fell after a 91 per cent collapse in second-quarter free cash flow.
Nasdaq futures rose 0.7 per cent in Asian hours while European futures were 0.3 per cent higher.
FED LOOKING TO MARKETS FOR CUES
In a post-meeting media conference, Fed Chair Kevin Warsh vowed to contain inflation but gave no indication of the steps the central bank might take.
Warsh noted that bond yields had risen notably since the Fed’s last policy meeting, reflecting market expectations of higher interest rates. He welcomed the move, while stressing that it did not oblige the Fed to validate those expectations with policy action.
“To me this is a way of saying the market has done the Fed’s job so far,” said Blerina Uruci, chief US economist at T Rowe Price.
“Ultimately, Warsh’s hawkish tone will not be enough to ensure price stability. The market will learn the hard way that no forward guidance means Warsh and the FOMC will not deliver on a policy outcome just because the market has priced it.”
That confusion left yields on 30-year US bonds at 5.2039 per cent, having hit their highest since June 2007 at 5.2273 per cent late in New York trading.
Fed funds futures now implied around a 60 per cent chance the Fed would lift rates at its next meeting in September and had 33 basis points of tightening priced in by year-end.
“The Fed is likely to face ongoing questions around its credibility,” said Kerry Craig, global market strategist at JP Morgan Asset Management.
“The gap between the Fed’s rhetoric and its actions may pose a challenge for market pricing. A new chair faces a divided committee and a bond market that’s starting to question the central bank’s resolve.”
Read the full article here
