US stocks swung sharply on Thursday, with the Dow Jones Industrial Average surrendering early gains to close more than 200 points lower as profit-taking emerged late in the session. An early rally fuelled by strength in chipmakers and technology shares on news of planned US semiconductor tariffs and possible exemptions faded as the day progressed. Sentiment was further shaped by the Bank of England’s decision to cut interest rates for the first time this year, oil price moves linked to a potential Trump-Putin meeting, and mixed global market performances influenced by trade policy developments and economic data.

Key Takeaways:

  • Dow Falls After Sharp Reversal: The Dow Jones Industrial Average dropped 224.48 points, or 0.51%, to 43,968.64 after being up more than 300 points at its high and down over 390 points at its low. Caterpillar slid 2.5% after warning of tariff impacts, while Eli Lilly tumbled 14% on disappointing obesity pill trial results despite beating earnings estimates and raising guidance.
  • S&P 500 Maintains Weekly Gain: The S&P 500 slipped 0.08% to 6,340.00 but remains on track for a 1.6% weekly advance, supported by strong corporate earnings and resilient economic data despite tariff uncertainty. Semiconductor stocks were among the top performers after confirmation of exemptions for companies investing in US production.
  • Nasdaq Supported by Tech Strength: The Nasdaq Composite rose 0.35% to 21,242.70 and is pacing for a 2.9% weekly gain, with chipmakers leading the move higher. Advanced Micro Devices surged 5.7%, while ASML Holdings, Lam Research, Applied Materials, Micron Technology, and KLA Corp also posted solid gains on optimism over tariff exemptions.
  • European Markets Rise on Geopolitical Hopes and BOE Rate Cut: European equities finished mostly higher after the Kremlin said US President Donald Trump and Russian President Vladimir Putin are set to meet in the coming days, boosting sentiment alongside upbeat earnings. The Stoxx Europe 600 rose 0.92% to 546, with the DAX gaining 1.12%, CAC 40 adding 0.98%, and FTSE MIB climbing 0.93%. The FTSE 100 fell 0.69% as the pound strengthened following the Bank of England’s narrow 5–4 vote to cut interest rates from 4.25% to 4%, signalling a cautious approach to monetary easing. German trade data showed exports rising 0.8% in June versus 0.5% expected, with EU-bound shipments up 2.4%, but exports to the US down 2.1% to their lowest since February 2022. Imports rose 4.2%, narrowing the trade surplus to €14.9 billion from €18.5 billion in May. Analysts warn that Germany’s export-led economy faces mounting headwinds from US tariffs.
  • Asia-Pacific Markets Mostly Higher: Japanese shares hit record highs, with the Nikkei 225 up 0.65% and Topix up 0.72%, boosted by Wall Street’s tech rally and strong earnings. Taiwan’s benchmark jumped 2.6% as TSMC hit a record high on US investment plans, while South Korea’s Kospi rose 0.92% on news Samsung Electronics and SK Hynix will avoid 100% tariffs. Hong Kong’s Hang Seng gained 0.69%, and China’s trade data showed July exports up 7.2% year on year and imports up 4.1%. India’s Nifty 50 fell 0.60% and Sensex dropped 0.54% after new US tariffs lifted the total levy to 50%. Australia’s S&P/ASX 200 slipped 0.14%.
  • Oil Edges Lower on Putin-Trump Meeting Hopes: Brent crude fell 0.82% to $66.34 a barrel and WTI eased 0.53% to $63.82. Prices were pressured by expectations of progress in Ukraine talks after news of an imminent Trump-Putin meeting. US crude inventories fell by 3 million barrels last week, a sharper draw than expected, while China’s July crude imports dipped 5.4% month on month but rose 11.5% from a year earlier.
  • US Jobless Claims Tick Higher: Initial claims rose to 226,000 last week from 219,000, above the 221,000 consensus, while continuing claims climbed to 1.97 million, their highest since November 2021. Second-quarter productivity increased 2.4%, ahead of expectations, and unit labour costs rose 1.6%.
  • Treasury Yields Edge Higher: The 10-year yield rose 1.6 basis points to 4.246% after Trump nominated Stephen Miran to the Federal Reserve Board. The 30-year yield also gained 1.6 basis points to 4.828%, while the 2-year yield added nearly 2 basis points to 3.720%.

FX Today:

  • EUR/USD Consolidates Beneath Key Resistance Zone: EUR/USD settled at 1.1655, down 0.04%, in a 1.1611 to 1.1690 range. The pair held above the rising 50-day SMA at 1.1600, with the 100-day at 1.1393 and the 200-day at 1.0958 all trending higher to reinforce the broader uptrend. Price is consolidating just under 1.1700 after rebounding from the late-July dip. The structure remains constructive with higher lows since March and repeated demand around 1.1500–1.1550. Resistance is at 1.1700, then the upper July shelf near 1.1800, while support is at 1.1650, 1.1600, then 1.1550 and 1.1500. A daily close above 1.1700 would target 1.1800, while a fall below 1.1600 would risk a deeper retrace toward the mid-1.1500s.
  • GBP/USD Extends Recovery After Breaking Above 1.3400: GBP/USD closed at 1.3443, up 0.63%, after trading between 1.3346 and 1.3443. A strong bullish candle reclaimed the 50-day SMA at 1.3505 from below, with the 100-day at 1.3356 and the 200-day at 1.2990 rising steadily. The pair has rebounded from early-August lows near 1.3150, restoring a positive short-term tone within the broader uptrend in place since March. Resistance is at 1.3500, where prior supply and the 50-day converge, followed by 1.3600. Support is at 1.3400, then 1.3350 and 1.3300, with the 100-day offering an added cushion. A close above 1.3500 would strengthen the bullish case for 1.3600, while a move back under 1.3400 could bring sellers back toward 1.3350–1.3300.
  • EUR/GBP Reverses Lower After Failing to Hold 0.8700: EUR/GBP ended at 0.8669, down 0.65%, in a range between 0.8744 and 0.8669. A strong bearish candle closed back under 0.8700 but remains above the rising 50-day SMA at 0.8587, with the 100-day at 0.8526 and the 200-day at 0.8429 also trending higher. The cross has been in an uptrend since May, but repeated failures to clear 0.8750 in July highlight stiff resistance overhead. Support is at 0.8650, then 0.8587 and the 100-day. A move back above 0.8700 would ease downside pressure, while further weakness under 0.8650 could extend toward the mid-0.8500s.
  • USD/JPY Retreats as Rally Stalls Below 150.00: USD/JPY settled at 147.07, down 0.19%, after trading between 146.69 and 147.71. A modest bearish candle held above the 50-day SMA at 145.97, with the 100-day at 145.64 and the 200-day at 149.39. The pair has been consolidating since mid-July within a 146.00–150.00 band, with repeated upside failures near 150.00 where the 200-day also adds resistance. Resistance is at 148.50, then 150.00, while support lies at 146.00, followed by the 50-day and 100-day. A break under 146.00 could deepen losses toward 145.00, while a sustained push above 148.50 would refocus on the 150.00 barrier.
  • Gold Nears Range Top as Buyers Tighten Grip: Gold closed at $3,399, up 0.92%, after trading between $3,365 and $3,401. A bullish daily candle finished near the high and back above the rising 50-day SMA at $3,346, with the 100-day at $3,276 and the 200-day at $3,010 still trending higher. Momentum from the Q1 advance remains intact, with price compressing in a range since May between the low $3,300s and mid $3,400s. Thursday’s push tested the top of that range just beneath $3,400 where supply has capped rallies. The short-term bias stays constructive while candles hold above the 50-day and the higher low above $3,300. Resistance is at $3,400 and then the mid $3,400s, while support sits at $3,360–$3,345, followed by $3,300 and the 100-day. A close above $3,400 would open the way toward the mid $3,400s, while a drop under $3,360 would keep the range in play and risk a deeper move toward $3,300.

Market Movers:

  • Dutch Bros Soars on Strong Sales Outlook: Dutch Bros gained over 22% after Q2 revenue of $415.8 million beat forecasts and full-year guidance was raised to as much as $1.60 billion.
  • DoorDash Rises on Higher-Than-Expected Sales: DoorDash climbed more than 5% after Q2 revenue of $3.28 billion exceeded consensus estimates.
  • Fortinet Slumps on Narrower Outlook: Fortinet fell over 22% to lead S&P 500 and Nasdaq 100 decliners after reducing its full-year revenue range below analyst estimates.
  • Crocs Plunges on Weak Margin Forecast: Crocs sank 29% after projecting Q3 operating margins well below market expectations.
  • Chipmakers Surge on Tariff Exemptions: Advanced Micro Devices jumped 5.7% after President Trump confirmed exemptions for US-based production, lifting ASML Holdings and Lam Research more than 3%, and Applied Materials, Micron Technology, and KLA Corp over 2%.
  • Eli Lilly Drops on Trial Disappointment: Eli Lilly slid 14% after late-stage trial results for its weight-loss pill showed less efficacy than a rival drug, despite beating earnings estimates and raising full-year guidance.
  • Airbnb Slides on Slower Growth Outlook: Airbnb dropped over 8% after projecting Q3 revenue growth of around 8%, down from nearly 13% in Q2.

Markets ended Thursday mixed as profit-taking cut into earlier gains driven by technology strength and tariff-related optimism. While chipmakers and select growth stocks extended rallies on signs of exemptions for US-based production, heavy losses in industrial and pharmaceutical names weighed on the Dow. European equities advanced on geopolitical hopes and a Bank of England rate cut, while Asia-Pacific markets were mostly higher on strong earnings and upbeat data. Oil prices eased as the prospect of a Trump-Putin meeting fuelled hopes for progress in Ukraine, and gold closed just shy of key resistance at $3,400. Investors now turn their attention to upcoming economic releases and further developments on US trade policy that could shape near-term market direction.