Stocks, dollar brace for tech earnings, rate verdicts
A graph on a screen displays Japan's Nikkei share average outside a brokerage in Tokyo, Japan, October 6, 2025. REUTERS/Androniki Christodoulou
SYDNEY :Asian shares consolidated recent hefty gains on Tuesday as hopes for a thawing in global trade tensions kept risk appetites keen, while the bull run in tech stocks counted on a bumper round of mega-cap earnings this week.
The likelihood of lower borrowing costs in the U.S. and Canada this week supported bonds, and weighed on the dollar as investors waited to see just how dovish the Federal Reserve might be on the outlook.
Meanwhile, safe-haven gold huddled around $4,000 an ounce as a drop of 9 per cent in five sessions squeezed leveraged money out of what were very crowded trades.
"What began as a price rise supported by fundamentals now looks driven by retail enthusiasm," said Neil Shearing, group chief economist at Capital Economics.
"And with prices still at record highs in real terms, the next big move in gold is more likely to be down than up," he added. "Indeed, our new forecast is that the price will fall to $3,500/oz by the end of 2026."
Several Asian share markets have also hit all-time highs and were overdue a breather. The Nikkei eased 0.2 per cent, having surged 2.5 per cent on Monday as a rally in all things tech lifted it to gains of almost 27 per cent so far this year.
Japan's new Prime Minister Sanae Takaichi met U.S. President Donald Trump in Tokyo to discuss defence ties, trade and a package of investments in the U.S. in a $550 billion deal struck earlier this year.
South Korean stocks slipped 1.2 per cent, giving back just some of Monday's 2.6 per cent jump. Sentiment was aided by data showing the economy outpaced forecasts in the third quarter, led by strength in consumption and exports.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.2 per cent, while Chinese blue chips added 0.2 per cent. The Shanghai Composite Index cracked the 4,000 barrier for the first time since mid-2015.
EUROSTOXX 50 futures lost 0.2 per cent, as did DAX futures, while FTSE futures were a fraction lower. S&P 500 futures and Nasdaq futures were little changed near all-time peaks.
Tech stocks had again led Wall Street higher overnight, with Qualcomm jumping 11 per cent after it unveiled two artificial intelligence chips for data centres.
AN END TO QT?
There are lofty expectations for the "Magnificent Seven" tech heavyweights reporting this week, with Microsoft, Alphabet, Apple, Amazon and Meta Platforms all needing strong results to justify stretched valuations.
Aiming to curb expenses, Amazon is planning to cut as many as 30,000 corporate jobs starting on Tuesday, sources told Reuters.
In bond markets, 10-year Treasury yields held at 3.98 per cent as investors wait on Wednesday's Fed meeting. A quarter-point rate cut is considered a done deal, with the real focus on whether the Fed validates market pricing for a December easing as well.
There are also hopes the Fed will end the rundown of its balance sheet, otherwise known as quantitative tightening.
Canada's central bank is also expected to cut rates this week, while the European Central Bank and the Bank of Japan are seen holding steady.
The BOJ is likely to debate whether conditions are right to resume rate hikes as worries about a tariff-induced recession ease, but political complications may keep it on hold for now.
Wagers on a dovish Fed outlook saw the dollar slip 0.4 per cent to 152.20 yen, having stopped short of the recent 153.29 peak overnight.
The euro nudged up to $1.1660, but remains short of resistance at $1.1728. The dollar index eased 0.3 per cent to 98.643, but remained well within the recent trading range.
In commodity markets, oil prices eased on a Reuters report that eight OPEC+ nations are leaning towards making another modest increase in oil output for December when they meet on Sunday, as Saudi Arabia pushes to reclaim market share.
Brent dropped 0.2 per cent to $65.51 a barrel, while U.S. crude eased 0.2 per cent to $61.20 per barrel.
