A look at the day ahead in U.S. and global markets from Mike Dolan The worst day for the S&P500 since 2022 and mounting central bank easing bets suggest markets' serene 'soft landing' scenario is being questioned as China growth worries and U.
S. election risks mount. Even though a withering swoon in megacap tech stocks this week comes in the thick of the corporate earnings season, the incoming aggregate profit growth picture remains buoyant overall.
A first cut of second-quarter U.S. GDP estimates later on Thursday will hold that further up to the light.
Jitters about the lofty valuations of the so-called Magnificent Seven stock leaders, worries about excessive spend in artificial intelligence and exposure to China's stuttering economy have all been cited variously for the sharp pullback. Wednesday's Wall Street stock rout, which saw the S&P 500 mark its first 2%-plus loss in 356 sessions after sharp post-earnings losses for Tesla and Alphabet, sent shares tumbling around the world overnight. The VIX volatility gauge topped 19 for the first time since April even as stock futures tried to find a foothold on Thursday.
But aided by stepped-up Federal Reserve interest rate cut bets, a second Bank of Canada rate cut of the year on Wednesday and after China's central bank added more cuts to this week's surprise monetary easing, there appeared to be a dash for safety in bonds and havens like Japan's yen and the Swiss franc surged. Despite a heavy diary of new Treasury sales this wee.