Stocks Decline Buzz Around the Fed Rate Cut Fades – Europe Market Wrap

US market futures fell on Friday as negative earnings news dampened the enthusiasm surrounding interest rate hikes.

S&P 500 contracts fell mere hours after the underlying index set its 39th record high of 2024. FedEx fell 13% in premarket trading after missing profit expectations and warning that its operations will deteriorate. Europe’s Stoxx 600 plummeted after Mercedes-Benz sank up to 8.4% after lowering its financial projection due to slowing China sales.

The BoJ was in the spotlight as it maintained policy, with the yen falling 1% as Governor Ueda proved less hawkish than some traders expected. Ueda indicated that there is minimal rush to raise interest rates and that inflationary risks are diminishing.

The Fed’s bold half-point rate decrease this week reinforced confidence in its ability to engineer a smooth landing, but warnings from FedEx highlight the economy’s continuing vulnerabilities. Fed policymakers expect another half point of reductions this year. Treasury rates rose little, as a Dollar strength index surged.

In commodities, gold set a new record as the Fed’s aggressive start to policy easing spread through markets. Oil was on track for its largest weekly gain since February.