US growth and personal consumption expenditure data due to be released, along with Nvidia's eagerly awaited earnings report, stood out as global markets searched for direction, while expectations that negotiations could resume in the Middle East supported risk appetite. Easing concerns over energy supplies pushed oil prices lower and reduced pressure on bond yields.
October-dated Brent crude fell 2.6% to $86.3 a barrel. The yield on the US 10-year Treasury note remained flat at 4.65%; the dollar index rose 0.1% to 98.9, while gold fell 0.4% to $4,641 an ounce.
Fed expectations and Nvidia earnings in focus in the US
While concerns over inflation persisted in the US, expectations that the Federal Reserve could raise interest rates once more by the end of the year remained strong. Market participants focused on growth and personal consumption expenditure data, as well as the core personal consumption expenditures price index, which indicates the course of price pressures.
A slowdown in the core personal consumption expenditures price index could lead to a change in expectations for the Fed's monetary policy. This could increase volatility in the markets.
The earnings report expected from chipmaker Nvidia was closely watched for signs of whether the rally centered on artificial intelligence would continue. The company's shares gained 2.2% after seven consecutive trading days of losses.
The S&P 500 rose 0.32%, the Nasdaq 0.66% and the Dow Jones 0.30%. US stock index futures started the day mixed.
Canada announces retaliatory tariffs on US products
The Canadian government said it would impose retaliatory tariffs of 15%, 25% or 50% on approximately $20 billion worth of US products starting September 8, in response to the 50% tariffs the US imposed on numerous Canadian products.
Canada's Finance Ministry announced that the retaliatory tariffs would focus on the steel, dairy, household appliance, agricultural equipment, paper and electronics sectors. Steel and aluminum products, as well as furniture and clothing, which had previously been subject to a 25% retaliatory tariff, will face a 50% tariff.
A 25% tariff will apply to household appliances, dairy products such as cheese, fish and seafood, and certain steel and aluminum derivative products.
German data influenced pricing on European stock markets
European stock markets traded mostly higher, with the exception of France. Expectations of lower energy costs and macroeconomic indicators from Germany were the main factors driving movements in regional markets.
Germany's gross domestic product grew 0.3% in the second quarter from the previous quarter and 1% year on year. The Business Climate Index released by the Munich-based ifo Institute for Economic Research also rose to 88.8 points in August, extending its gains for a fourth consecutive month.
The FTSE 100 in the UK rose 0.29%, Italy's FTSE MIB 30 gained 0.34% and Germany's DAX 40 advanced 0.61%. France's CAC 40 fell 0.16%.
Shares of luxury fashion and accessories companies in France posted notable declines. Rising living costs in Europe, the impact of US-Iran tensions on regional tourism and slowing demand weighed on luxury consumer stocks.
Semiconductor shares support Asian markets
The increase in risk appetite on US and European stock markets also spread to Asian markets. Technology and semiconductor shares recovered ahead of Nvidia's earnings report.
In South Korea, SK Hynix shares rose 2.5%, Samsung Electronics shares gained 2.9% and Hanmi Semicon shares advanced 1.2%. Shares of SMIC, China's largest semiconductor manufacturer, also gained 4.8%.
Near the close, the Nikkei 225 was up 0.8%, the Shanghai Composite Index 0.6%, the Kospi 1.8% and the Hang Seng 0.6%.
Türkiye's five-year CDS premium falls to 217 basis points
The BIST 100 index on Borsa Istanbul ended the day down 0.19% at 14,473.42 points. The August contract based on the BIST 30 index on Borsa Istanbul Futures and Options Market rose 0.24% in the evening session compared with the regular-session close.
Türkiye's five-year credit default swap premium fell to 217 basis points amid expectations that geopolitical risks in the Middle East could ease and the impact of domestic liquidity management measures. This was the lowest level recorded since February 18.
Dollar/Turkish lira ended the previous day at 48.0920. The exchange rate rose 0.1% to trade at 48.1170 at the opening of the interbank market.
While the domestic data agenda is expected to remain quiet, US personal consumption expenditure and growth data will be monitored abroad. For the BIST 100 index, 14,400 and 14,300 points stand out as support levels, while 14,600 and 14,700 points are resistance levels.
Data to watch
- Weekly mortgage applications in the US
- July personal income in the US
- July personal spending in the US
- July personal consumption expenditures price index in the US
- July durable goods orders in the US
- Annualized second-quarter GDP data in the US
