Markets Pause, Geopolitical Tensions Flare, Uncertainty May Cap Index Gains Next Week

Global markets pause as geopolitical tensions flare, the S&P 500 is sitting at a new all-time high but may not move much higher.
Thomas Hughes
List of stock market indices

The U.S. Futures Are Slightly Lower On Friday

The U.S. futures are pointing to a flat to a slightly lower open for the market on Friday. The pause comes a day after the broad-market S&P 500 surged 1.0% to set a new all-time high. The market is in rally-mode following a more-dovish than expected policy statement from the FOMC. The FOMC sees mounting global risks dragging on U.S. economic data and hinted at an interest rate cut as soon as next month. The CME Fed Watch Tool is showing a 100% chance of cut next month and a near 85% chance of three cuts by the end of the year.

Geopolitical tensions and uncertainty are at the heart of today’s market pause. News that President Trump had ordered, then canceled, a strike against Iran raised fears an incident will soon follow. Iran attacked and shot down a U.S. drone on Thursday and is accused of firing upon internationally flagged tankers last week.

In economic news, traders will be looking for flash-PMI readings on the manufacturing and services sector at 9:45 AM. Both are expected to show some slowing within the economy. In stock news, Canopy Growth Corporation reported better than expected revenue as pot surge in Canada. The company also reported a larger than expected loss as aggressive growth tactics eat into cash flow.

European Markets Are Mixed At Midday

The European indices are flat and mixed at midday as traders weigh geopolitical concerns versus the earnings outlook. Iran is the focus of the day but the Brexit, weakening data, central bank activity, trade tensions, and the upcoming G-20 meeting all weigh on sentiment. The FTSE led with an advance of 0.10% while the DAX and CAC are both showing losses near -0.05%.

The semiconductors are in the lead, down more than -1.0% across the board, after a revenue warning from IQE. IQE makes silicon wafers for semiconductors and is part of the Apple supply chain. The company says revenue will be weaker than expected because of the Huawei situation and trade tensions between China and the U.S. In other news, Lundin Petroleum gained 5% on the back of rising oil prices. Netaxix fell -6% after Morningstar announced a review of a company-owned business.

Geopolitical Uncertainty Caps Gains In Asia

Asian markets were mostly lower in Friday trading as geopolitical uncertainty caps gains. The Shanghai Composite is the only major index to show a net gain and that 0.50%. The Japanese Nikkei led the losers with a decline of -0.95%, the Hong Kong Hang Seng fell -0.27% despite a -1.0% fall in HSBC. The Australian ASX closed with a loss of -0.55%, the Korean Kospi -0.27%.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.