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US stocks continue to fall after Fed maintains rates
?U.S. Stocks remained lower for the day. Interest-rate sensitive yields on 2-year Treasury notes reversed an earlier rise and the dollar fell?on Wednesday, after the Federal Reserve kept interest rates steady. This was a move which economists had expected. The ?decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee that "preferred" a quarter-percentage-point hike at this meeting. The recent rise in oil prices, due to the return of the war against Iran, had some expecting that the U.S. Central Bank would raise rates this week. The U.S. central bank is still raising rates despite the fact that June's inflation data was lower than expected. JP Powers is chief investment officer of TWA Wealth Partners. He said that this was expected after the June inflation print revealed some progress. "But with each meeting, we are now creating more uncertainty than ever before." The Dow Jones Industrial Average fell 1.55% to 51,928.87. The S&P 500 dropped 0.50% to 7391.31 while the Nasdaq Composite declined 0.37% to 24784.10. The yield on the interest rate-sensitive 2-year Treasury note was unchanged at 4.277%. The yield on the benchmark U.S. 10 year notes increased 3.67 basis points, to 4.641%. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) fell by?0.25%, falling from 101.17. The oil prices rose by around 7% as major airstrikes resumed across the Middle East. This quelled hopes of an imminent end to the?Iran war. The rally was exacerbated by data from the 'industry showing a decline in U.S. oil inventories. Bill Merz is the head of capital market research and portfolio development at U.S. Bank Wealth Management, Minneapolis. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. The global markets have been volatile this month, as investors question whether the AI spending boom will last. This is despite signs that U.S. major companies are continuing to invest billions in the technology and continue to drain cash from their free flow. "The focus is shifting away from budgets to return on investment." Investors are looking for evidence that AI capex generates revenues right now and also strengthens 'the future growth prospects,' said Gina Martin Adams, chief strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip technology and its cheaper AI models, investors are paying more attention. The expectations have become so inflated that SK Hynix shares fell 9.61% despite a six-fold increase in its quarterly profit. South Korea's KOSPI - which has become emblematic for the wild swings of AI sentiment - fell almost 6% in a single day, after falling more than 10% and reaching a three month low. South Korea's finance ministry announced on Wednesday that it would introduce new restrictions on leveraged exchange-traded products, such as ETFs with single stocks. These will include a cap on individual investors who invest in these products. The pan-European STOXX 600 fell by 0.29% while Europe's FTSEurofirst 300 fell by 0.36%. The MSCI All Country World Price Index was down 0.45% in the last few days and had earlier dropped to its lowest level since 11 June.
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Official Israeli source: Trump and Netanyahu discussed all options, including an attack on Iran.
?U.S. In their meeting on Wednesday, President Donald Trump and Israeli Premier Benjamin Netanyahu discussed all possible ways to stop Iran's nuclear program, including diplomacy, pressure from the economy and force. The official told reporters in a press conference after the two men had met at the White House, on Tuesday that Netanyahu did not inform Trump of Israel's preference for an attack against Iran. The official stated that Trump's decision was final. The official stated that Trump had 'three options, all of which were discussed in detail: a deal, continuing the blockade, economic pressures and a massive strikes. Officials said there was evidence that?Iran’s clerical leaders have been rattled? by rising inflation, but that the impact on the global economy and the oil markets were also taken into consideration. The oil prices soared on Wednesday, one of the biggest spikes since the beginning of the war on February 28. This was due to a joint Israeli and U.S. aerial campaign against Iran. Tehran responded by launching strikes on Israel and Gulf States. Israel did not take part in the two-week U.S. airstrikes this month, which prompted Tehran to respond by firing on U.S. military bases. However, it has warned Tehran that it will strike back if attacked. The United States and Saudi Arabia attacked Iran-backed paramilitary groups on Wednesday. Trump promised to "beat the fucking sh*t" out of Iran after it fired at U.S. soldiers days after he stopped?air strikes. Iran has confirmed that it fired at U.S. bases in Jordan, as well as ships in the Strait of Hormuz. It also rejected an Omani proposal for a joint management of the Strait.
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SAIL and Krakatau Steel to invest $350 Million in a stainless steel plant
Two Indian sources said that India's state run Steel Authority of India and Indonesia's Krakatau Steel are planning to invest up to $350 million in a stainless-steel slab plant in Indonesia. Sources said that the?plant?will have a?capacity of?500,000 metric tonnes and will be operational in the next three to five years. SAIL and Krakatau Steel have signed a preliminary joint venture agreement in Indonesia to produce stainless steel plates. This was done during the visit of Indian Prime Minister Narendra Modi to Indonesia earlier this month. Sources said that SAIL will send a "technical" team to Indonesia in the next month to produce a feasibility study. After this, both companies will finalise details such as the equity structure, timeline for government approvals, and other details. Sources declined to be identified because the discussions aren't public. SAIL didn't respond to an email sent Monday seeking comment. Krakatau Steel?did not respond to an email request for comments made on Tuesday. Sources?said that the proposed plant's capability could be?expanded once it becomes operational. One source said that partnering with Krakatau Steel could help SAIL obtain nickel at a lower price, which is a crucial raw material for stainless steel production. Indonesia produces more than half of the world's nickel. The second source said that SAIL would consume all the output from the planned Indonesian facility, and then bring the stainless steel plates to its Salem plant to be rolled and finished. Salem is located in Tamil Nadu, a southern Indian state. Sources said that the state-run steelmaker would primarily sell the finished product to Indian clients, with a small portion?possibly being exported to Europe and the Middle East. According to commodities consultancy BigMint, SAIL was India’s third largest?steel manufacturer in the fiscal year ending March 2025. It held a 10.1% market share. India, which is the second largest producer of crude steel in the world after China, has identified Indonesia as well as more than a dozen?countries to cooperate with the steel industry. This will boost exports and ensure key raw materials. BigMint data shows that India's finished steel consumption has increased by 55% in the last five years. This is more than double the increase in production of 42%. Indian steelmakers are "pivoting" to the domestic market in order to offset weaker imports from Europe and Britain, but Chinese steel is sabotaging that strategy. (Reporting from New Delhi by Neha Arora; Additional reporting in Jakarta by Fransiska Nanangoy; Editing by Mayank Bhadwaj, Christian Schmollinger).
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Stocks fall as Mideast conflict reignites and Fed decision looms
U.S. stock prices fell, while oil and Treasury yields rose, as the fighting in the Iran war resumed just hours before the highly anticipated 'Federal Reserve interest rate decision due later on Wednesday. Although the Fed is expected to keep rates unchanged, traders have priced in roughly 34% of a rate hike. This is because rising oil prices are reigniting concerns over inflation which remains above the U.S. Central Bank's annual target of 2%. The markets have fully priced in a Fed rate hike for the September meeting. Chris Low, FHN Financial's chief economist, said that if oil prices continue to rise in September, then the Fed will determine that the shock has lasted for long enough to warrant a rate increase, or increases. The market also believes that some participants will make the case for rate hikes today...and there's a good chance they can convince a majority to support them. After major airstrikes resumed, oil prices rose more than 6%. This quelled hopes of an imminent end to Iran's war. This rally was exacerbated by data from the industry showing a decline in U.S. crude inventories. The Fed chairman Kevin Warsh prefers to give less "forward guidance" on the Fed's probable monetary path. The yield on the benchmark U.S. 10 year notes increased 2.45 basis points from late Tuesday to 4.629%. The Dow Jones Industrial Average dropped 1.37% to 52 024.98, the S&P 500 declined 0.62% at 7,382.73 while the Nasdaq Composite was down 0.83% at 24,670.23. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. Investors have questioned the sustainability of AI spending boom amid signs that U.S. major companies are continuing to invest billions in the technology and continue to drain free cash flow. The focus is now on returns from investment, not spending plans. Investors are looking for evidence that AI capex generates revenues right now and also strengthens future growth prospects, said Gina Martin 'Adams, Chief Market Strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip models and Chinese firms rolling out cheaper AI models, there is a growing concern. Even a six-fold increase in SK Hynix’s quarterly profit failed to meet expectations, sending the shares tumbling by 9.61%. South Korea's KOSPI fell almost 6% in a single day, after falling more than 10% and reaching a three-month high. South Korea is responding by introducing additional 'curbs' on leveraged single-stock exchange-traded fund, or ETFs. This includes a cap that would limit an individual investor's investment to 20% of total assets. The pan-European STOXX 600 fell by 0.21% while Europe's FTSEurofirst 300 fell by 0.28%. The MSCI All Country World Price Index dropped by 0.57%, to its lowest level since June 26.
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Hungary's Paks Nuclear Plant will shut down one reactor due to a drop in the Danube water levels
Operator MVM announced that the Paks nuclear plant in Hungary will shut down one of the 'four reactors' at a time of?1300 GMT on Wednesday due to record low water levels along the Danube River, which provides cooling water for the facility. On Monday, the plant had already cut output by 254 Megawatts at another unit. The plant operates four Russian-built nuclear reactors with a combined 2 gigawatts of capacity. It produces almost?half of Hungary’s electricity. The shutdown on Wednesday will reduce production to?about 60 percent of its capacity. It follows?contingency steps taken in June, during a heatwave record. Authorities exempted this plant from temperature limits for discharged cooling waters. The water levels along the Danube are now at new record lows. This has disrupted cargo and river cruises on one of Europe's most busy?waterways. The Environment Minister Laszlo Gajdos stated earlier on Wednesday that the Hungarian water management authorities are ready to assist in ensuring cooling water supplies for the plant. He said that the authorities had placed four pumping pontoons, and two floating cranes near Paks in preparation for a possible deployment as water levels are expected to continue to drop over the next few days. Reporting by Gergely szakacs and Anita Komuves. Mark Potter edited the article.
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NextEra and Brookfield plan a $100 billion Kentucky datacenter campus
NextEra Energy and Brookfield are building a $100 billion campus of data centers at an 'ex-uranium enrichment site' in Paducah, Kentucky. The soaring demand for electricity in the United States is driving companies to invest heavily into artificial intelligence data centres and other technologies that strain an aging U.S. electric grid. NextEra is the largest U.S. power company and will provide 2.6 GW in battery storage and 2 gigawatts (GW) of natural gas to support the datacenter. Brookfield, on the other hand, will own and operate the 1.8 GW campus. One gigawatt can power approximately 750,000 homes. The campus will be built on the Department of Energy’s Paducah Site. This site was originally constructed in 1952 for the production of enriched uranium, but it was closed down later. NextEra said the project complies with the Trump Administration's "Ratepayer Protection Pledge" which seeks?to ensure that companies building and using data centres?pay over?and above normal rates to avoid costs being passed on to average households. Brookfield CEO Bruce Flatt said in a statement that "the Department of Energy Paducah Site will be the seed of a plan to invest 100 billion dollars?in AI Infrastructure". The project should be completed in 2032. Reporting by Vallari Shrivastava, Bengaluru. Editing by Tasim Zaid
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Allied Gold's $4 Billion sale to China's Zijin falls through, lands a $295 M investment
Zijin Gold & Allied 'Gold has scrapped its planned C$5.5 Billion ($3.90 Billion) buyout. Instead, the?Chinese?company took a 9.2% share for around $295 M. In premarket trading, shares of Allied Gold listed in the U.S. fell by nearly 15%. The companies announced on Wednesday that they had mutually agreed to allow the deadline of July 29 to expire as "there was no reasonable likelihood" that the remaining conditions would be met in a reasonable time frame. Allied also cited broader external factors affecting trans-border transactions at this scale but did not provide any further?details. Zijin Gold operates mining operations in Asia, Africa and South America, while the Canadian firm has gold mines,?development and development projects on the Ivory Coast, Mali, and Ethiopia. In January, Zijin announced its agreement to purchase Allied for C$44 a share. ZIJIN?REMAINS INVESTOR Zijin has agreed to purchase approximately 12.8 million newly-issued Allied shares for?C$32.55 each in a private placing for the '9.2% stake. The transaction is expected to close around August 10. Allied stated that it 'expects' to use the proceeds - including the completion and ramping up of the Kurmuk Mine in Ethiopia and the expansion of the Sadiola Mine?in Mali - to advance growth initiatives. It also said they expect the proceeds -including increasing production – at their Ivory Coast operations, and funding exploration across the business. ($1 = 1.4098 Canadian dollars) (Reporting by Arunima Kumar in Bengaluru; Editing by Vijay Kishore)
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S&P says El Nino is unlikely to affect ratings for the time being
One of S&P Global’s top analysts said that El Nino will not 'by itself' lead to sovereign ratings downgrades, unless it is significantly worse than expected and governments take costly measures to support the affected countries. Joydeep Mukherji is S&P's Latin America lead ratings analyst. She said that the rating impact would be determined by the severity of the droughts and flooding caused by a potential "super" El Nino, as well as how policymakers handle the fallout. Mukherji stated in an interview that "if it's a flood or a dry spell that disrupts economic activity, then you assume?it will pick up within six months, twelve months." If that's the only thing that happens, ratings should be able?to withstand that kind of stress." The key factor is more likely to be the response of the governments in the hardest-hit countries. Mukherji stated, "If there is a small fiscal intervention to help those affected by the crisis, then that's a good thing." However, broader measures like a control on fuel or electricity prices could increase fiscal pressures. He said: "Suddenly, you've got a fiscal issue on the side. Not just the disruptions caused by natural disasters." The government faces a difficult choice: either they allow a part of the cost to be borne by businesses and households, or they take on a greater share through increased public spending, larger deficits, and more borrowing. He said that policy response was key. "Do governments share or spare the costs or do they take it all on themselves in their balance sheet by increasing deficits and debt?" He said that countries with flexible exchange rate may be better able to absorb weather-related shocks. As examples, he cited Colombia and Peru as two countries where economic impacts could be "substantial". The 'political tools' available to maintain competitiveness in a country without its own currency, such as Ecuador with the dollar, are fewer. S&P does not expect El Nino will trigger a negative rating wave. He warned that there is still a lot of uncertainty about the magnitude of the phenomenon.
Stocks dip, dollar advances after data, Powell remarks
A gauge of worldwide stocks fell for a 3rd straight session on Thursday while the dollar climbed up, after U.S. labor market data and comments from Federal Reserve Chair Jerome Powell suggested a slower course of rate cuts from the reserve bank.
The Labor Department said initial claims for state unemployment benefits dropped 4,000 to a seasonally changed 217,000 for the week, a little listed below expectations for 223,000 by financial experts polled , suggesting the weak October federal government payrolls report was an abnormality.
In the current inflation reading, the producer price index for final demand rose 0.2% last month, matching expectations, after an upwardly revised 0.1% gain in September.
The data comes after Wednesday's customer price index increased as anticipated in October amid higher costs for shelter such as rents.
In the 12 months through October, the PPI increased 2.4%. after advancing 1.9% in September.
Powell said continuous financial growth, a strong task market, and. inflation that stays above the 2% target implies the U.S. reserve bank does not need to hurry to lower interest rates and. can deliberate thoroughly.
There was some issue after the election that Trump's. threatened tariff policies would trigger inflation and that surged. rates a little bit, however typically everyone calms down a little. bit after a couple of days and the marketplace gets back to its knitting,. so I expect to see some volatility around here, stated Scott. Welch, chief investment officer at Certuity in Potomac,. Maryland.
The pressure on rates moving forward from here is up,. not down. We might see rates decline a bit but when you. take a look at the state of the economy, when you take a look at the. anticipated legislative and executive policy plans, they are. going to bounce around in between 4% and 5%.
Stocks at first rallied in the wake of the U.S. presidential election. Each of Wall Street's significant indexes. closed at records on Monday, but have stalled in recent days as. bond yields have relocated to four-month highs.
U.S. stocks fell after the information and extended decreases after. Powell's comments.
The Dow Jones Industrial Average fell 175.86 points,. or 0.40%, to 43,782.33, the S&P 500 fell 29.15 points, or. 0.49%, to 5,956.23 and the Nasdaq Composite fell 105.02. points, or 0.55%, to 19,125.71.
Financiers have actually gravitated toward assets anticipated to benefit. from U.S. President-elect Donald Trump's policies in his second. term after he pledged to impose high tariffs on imports from key. trading partners, lower taxes and loosen up government guidelines.
But bond yields and the dollar have likewise surged just recently on. issues that while Trump's policies will stimulate development, they also. could revive inflation after a long battle versus rate. pressures following the COVID-19 pandemic. In addition, tariffs. might cause increased federal government loaning, more ballooning. the financial deficit and cause the Fed to modify its course of. financial policy easing.
MSCI's gauge of stocks across the globe fell. 3.49 points, or 0.41%, to 851.36 and was on track for a 3rd. directly daily decrease after five consecutive sessions of gains.
European shares rebounded from three-month lows, led by. energy and tech stocks after a round of largely favorable. corporate earnings. The STOXX 600 index closed up. 1.08%.
The dollar index, which measures the greenback. against a basket of currencies, rose 0.34% to 106.82, with the. euro down 0.29% at $1.0532. The greenback is on pace for. its 5th straight session of gains.
Versus the Japanese yen, the dollar strengthened. 0.47% to 156.18. Sterling weakened 0.27% to $1.2669.
Expectations for more Fed rate cuts have been called back. over the previous few weeks, however have actually become more unstable just recently. Expectations for a 25 basis point cut at the Fed's December. conference were at 72.2%, below 82.5% in the previous session but. above the 66.6% a week back, according to CME's FedWatch Tool.
The yield on benchmark U.S. 10-year notes. declined 1.4 basis indicate 4.437%, paring losses after. Powell's comments.
Fed Guv Adriana Kugler stated the central bank has actually made. substantial development toward accomplishing its task and inflation. goals, while stopping brief of using company guidance over what. that indicates for the near-term financial policy outlook.
Richmond Federal Reserve President Tom Barkin stated high. union wage settlements and the possible tariff boosts are. among the unpredictabilities that could make Fed officials more. careful about believing they have actually won their battle versus high. inflation.
U.S. unrefined settled up 0.39% to $68.70 a barrel and. Brent increased to settle at $72.56 per barrel, up 0.39% on. the day, in part due to dollar strength and as rising U.S. crude. inventories contributed to concerns of oversupply.
(source: Reuters)