Stocks, Dollar Hold Steady Ahead of Tech Earnings and Central Bank Decisions

Asian shares paused on Tuesday after a strong rally, as investors awaited key tech earnings reports and major interest rate decisions in the US and Canada. Hopes for easing global trade tensions continued to support market sentiment, while expectations of lower borrowing costs pressured the US dollar and buoyed bonds.

Markets Consolidate After Strong Gains

Asian equities were mostly steady, taking a breather after reaching record or multi-year highs. Japan’s Nikkei slipped 0.2%, following a 2.5% jump on Monday that extended its year-to-date gains to nearly 27%.

South Korea’s KOSPI dropped 1.2%, paring Monday’s 2.6% surge, though upbeat third-quarter GDP data showing strong consumption and exports supported the broader outlook.

China’s Shanghai Composite Index rose 0.2%, breaking above the 4,000 level for the first time since 2015, while MSCI’s Asia-Pacific ex-Japan index edged 0.2% lower.

In the US, S&P 500 and Nasdaq futures were little changed near record highs after Qualcomm soared 11% on unveiling new AI chips for data centres.

Tech Earnings in Focus

Wall Street’s “Magnificent Seven” — Microsoft, Alphabet, Apple, Amazon, and Meta Platforms — are all set to report results this week. Analysts say strong performances are essential to justify their lofty valuations after months of gains.

Meanwhile, Amazon is reportedly planning to cut up to 30,000 corporate jobs, part of its broader cost-cutting efforts, according to sources cited by Reuters.

Central Bank Decisions Loom

Investors are closely watching the Federal Reserve’s policy meeting on Wednesday. Markets widely expect a quarter-point rate cut, but attention is on whether the Fed signals another reduction in December or hints at ending quantitative tightening — the unwinding of its balance sheet.

The Bank of Canada is also anticipated to cut rates this week, while the European Central Bank and Bank of Japanare expected to keep policy steady.

BOJ policymakers may debate whether conditions are right for rate hikes as concerns about a tariff-driven recession fade, though political factors could delay any move.

Currencies and Commodities

The US dollar slipped 0.4% to 152.20 yen, easing from its recent peak of 153.29. The euro edged up to US$1.1660, while the dollar index fell 0.3% to 98.643, remaining within its recent range.

Gold hovered near US$4,000 an ounce after sliding 9% over the past five sessions, with analysts warning that speculative excesses have built up.

“What began as a price rise supported by fundamentals now looks driven by retail enthusiasm,” said Neil Shearing, chief economist at Capital Economics, predicting prices could fall to US$3,500/oz by end-2026.

In energy markets, Brent crude dipped 0.2% to US$65.51, while US crude fell 0.2% to US$61.20 after a Reuters report said eight Opec+ nations are leaning toward a modest production increase in December, as Saudi Arabia seeks to reclaim market share.

Outlook

With global equities near record highs and expectations of monetary easing rising, investors are treading cautiously. The week’s outcomes — from tech earnings to Fed guidance — could set the tone for whether the bull run extends or coolsinto year-end.