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Microsoft and Alphabet earnings soothe markets ahead of Fed decision

European shares rose and Wall Street stock futures rose on Wednesday after earnings from technology companies Microsoft and Alphabet reassured investors ahead of a crucial U.S. interest rate decision later in the day.

The regional Stoxx 600 stock index added 0.2% in early trade, while London’s FTSE 100 rose 0.3%.

Microsoft, one of the largest businesses in the technology sector that dominates US stock indices, missed analysts’ forecasts for quarterly revenue and profit, but said that The cloud computing business remains strong. The group’s shares rose 4% in after-hours trading in New York.

“The core DNA of Microsoft’s growth story appears to have momentum into 2023 despite the economic headwinds,” said Wedbush analyst Daniel Ives.

Alphabet shares also added 5% in after-market trading in response to financial results from parent Google. CEO Sundar Pichai has assured investors that the group will continue to make long-term investments despite this The slowest pace of quarterly revenue growth for two years.

The tough tech results lifted U.S. futures. Contracts tracking the tech-heavy U.S. Nasdaq 100 index rose 1.4%. Those in the broader S&P 500 rose 0.9%.

Later on Wednesday, the US Federal Reserve will announce its latest interest rate decision, as futures markets fell An increase of 0.75 percentage points to 2.25-2.5 percent after inflation hit a new 40-year high in June.

The U.S. central bank also raised its key funds rate by 0.75 percentage points in June, as tighter monetary policy helped boost the S&P 500 last month into a bear marketwhich is defined as a drop of 20 percent from the last peak.

The U.S. stock gauge rose nearly 4 percent during July, however, as traders saw signs of a U.S. economic slowdown as likely to weigh on the Fed reduce his pace Coming up later this year.

Treasury markets in the US traded cautiously ahead of the decision. The yield on the two-year bond, which tracks monetary policy expectations, was steady at 3.05%.

The 10-year Treasury yield added 0.02 percentage points to 2.81 percent, down from about 3.5 percent in mid-June, with the decline reflecting rising debt prices as investors lowered expectations for interest rates and economic growth.

The dollar index, which measures the US currency against six others, fell 0.1% but remained close to its highest level in two decades.

In Asia, Hong Kong’s Hang Seng index fell 1.5 percent, mirroring declines on Wall Street on Tuesday after Walmart warned about profits, blames food and fuel inflation. Topix in Tokyo closed up 0.1%.

Microsoft and Alphabet earnings soothe markets ahead of Fed decision Source link Microsoft and Alphabet earnings soothe markets ahead of Fed decision

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