TOKYO — Global stocks fell in cautious trading on Tuesday ahead of earnings reports around the world, after Wall Street’s long, record-breaking rally lost steam.
The French CAC 40 lost 0.3% to 7,516.20, while the German DAX rose 0.4% to 19,526.85. Britain’s FTSE 100 fell 0.5% to 8,281.14. The future for the S&The P 500 and the Dow Jones Industrial Average fell 0.3%.
In Asian trading, Japan’s benchmark Nikkei 225 fell 1.4% to end at 38,411.96. The Australian S&The P/ASX 200 fell 1.7% to 8,205.70, while South Korea’s Kospi fell 1.3% to 2,570.70.
Hong Kong’s Hang Seng rose 0.1% to 20,498.95 and the Shanghai Composite rose 0.5% to 3,285.87 after a rate cut that came into effect on Monday.
“The next two weeks are going to be a wild ride. Volatility in stocks, bonds and currencies has soared as investors brace for a perfect storm of risks: a hotly contested US election, critical interest rate decisions in both the US and Europe, the looming threat of broader conflict in the Middle East, and the ever-present pressure of quarterly results,” said Stephen Innes, managing partner at SPI Asset Management, in a commentary.
On Monday the S&The P500 fell 0.2% and the Dow Jones fell 0.8%. The Nasdaq index rose 0.3%.
Wall Street’s rally to records this year is based on the hope that the US economy will be able to do so escape of the the worst inflation in generations without being painful recession which many investors worried might be inevitable.
With the Federal Reserve now lowering interest rates To keep the economy going, optimists hope that stocks can rise even further. But critics warn that stock prices appear overpriced because they have risen much faster than corporate profits.
That puts pressure on companies to deliver earnings growth to justify their stock prices, and more than 100 companies in the S&P 500 will provide details this week about their summer performances. This includes heavyweights such as AT&T, Coca-Cola, IBM, General Motors and Tesla.
The Bank of Canada will also announce its latest interest rate decision on Wednesday, which could see it cut by half a percentage point.
In energy trading, benchmark U.S. crude lost 20 cents to $69.84 a barrel. Brent crude, the international standard, fell 18 cents to $74.11 a barrel.
In currency trading, the US dollar rose from 150.69 yen to 150.99 Japanese yen. The euro rose from $1.0819 to $1.0829.