Corporate earnings results affect stock indicators

Cautious sentiment dominates stock market movements

By Raed Alkhedr | @raedalkhedr | 5 July 2023

  • Despite better-than-expected quarterly profits, Morgan Stanley's stock experienced a decline

  • Oil prices are being pressured by concerns about a global demand slowdown

  • The rise in the US dollar is affecting the price of gold

US stocks experience slight dip on Wednesday

US stock futures experienced a decline on Wednesday as investors continued to monitor corporate earnings results and central banks' efforts to control strong inflationary pressures. The futures for the Dow Jones Industrial Average fell by 0.3%, the S&P 500 index declined by 0.5%, and the Nasdaq Composite index dropped by 0.8%. Additionally, bond yields rose after UK inflation data showed a slower growth rate of 10.1%. The two-year bond yield approached 4.3%, as markets expected the US Federal Reserve to keep interest rates steady in the second half of 2023.

Reports on earnings from major banks, including Morgan Stanley, concluded with better-than-expected results, however, despite the announcement, Morgan Stanley's shares declined by 3%. The markets closely watched bank sector earnings amid concerns of bank failures due to Federal Reserve policies.

Oil prices experience decline over demand shortage concerns

Oil prices experienced a drop of approximately 2% during today's trading session over concerns about a possible decline in demand rates in the near future. Despite the declining inventories, the likelihood of continued interest rate hikes may slow growth and limit oil consumption. Brent crude futures fell to $83.07 per barrel, while US West Texas Intermediate crude fell to $79.22.

On Tuesday, Atlanta Federal Reserve Bank President Raphael Bostic said that the Fed is likely to raise interest rates again as it continues to fight inflation, adding to the concerns over the future of oil consumption.

Gold prices drop as US dollar strengthens

Gold prices experienced a decline on Wednesday as the US dollar regained some strength. The drop in gold prices came as investors assessed the possibility of the Federal Reserve raising interest rates again in May before holding steady. The value of gold fell to $1,970 per ounce, with most members of the US Federal Reserve adopting a hawkish tone. However, gold prices later recovered some of their losses and traded near $1,980 per ounce.