Investors are on edge as they await the release of the minutes from the Federal Reserve’s meeting earlier in May, set to be released Wednesday afternoon. They’re particularly interested in any hints of the central bank’s future monetary policy. In addition to this, the investment world is bracing for more earnings announcements with clothing retailer American Eagle Outfitters and semiconductor giant Nvidia due to post their results after the bell on Wednesday1.
In Europe, stocks are trending downwards, with the Stoxx 600 index down 1.4% early Wednesday. Particularly hard hit are auto stocks, falling by 2.3%, and mining, which dropped by 2.25%. France’s CAC 40 was down 1.54%, with the U.K.’s FTSE 100 and Germany’s DAX lower by 1.4% and 1.3%, respectively2.
Over in New Zealand, the Reserve Bank has raised its benchmark policy rate to 5.5%. This marks the 12th consecutive rate hike since October 2021. The New Zealand dollar responded by strengthening 0.96% against the greenback3.
In Asia, shares of Alibaba tumbled in Hong Kong, falling as much as 2.7% following reports of layoffs in the company’s cloud computing division. The news comes as the division prepares for an initial public offering4.
Meanwhile, Japanese manufacturers are showing a positive sentiment for the first time this year, according to the Reuters Tankan survey for May. The sentiment index for big manufacturers increased to +6, up from April’s figure of -35.
Back in the U.S., companies are starting to feel the impact of lower tax refunds this year. The average tax refund for the week ending May 12 was $2,812, down 7.3% from the same period last year. This is believed to be due to the elimination of certain tax credits after pandemic-era relief expired6.
In the commodities market, copper is down 6.07% in May, on track for its worst month since June 2022. Year to date, the metal has lost 4.09%7.
In after-hours trading, Palo Alto Networks, Urban Outfitters, and Toll Brothers made big moves, with their shares gaining 3.5%, 6%, and more than 3%, respectively. All three companies posted earnings and revenue that exceeded estimates8.
U.S. stock futures had a flat opening Tuesday night, with the Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq 100 futures all ticking up 0.07%9.