Markets retreat as earnings disappoint and Fed decision looms

​​​Wall Street stumbles as earnings season loses momentum

​Wall Street's remarkable run hit a speed bump as disappointing corporate results dragged major indices lower from their record peaks. The S&P 500 retreated 0.30%, while the Nasdaq 100 declined 0.38% and the Dow Jones fell 0.46%.

​The retreat came as several household names delivered underwhelming results. UnitedHealth led the declines alongside Whirlpool and UPS, both of which cited trade-related headwinds in their guidance.

​Whirlpool delivered a particularly brutal assessment, slashing both its full-year guidance and dividend as the appliance maker grappled with import pull-forward ahead of potential tariffs. The company's struggles highlight how trade uncertainty continues to weigh on corporate planning.

​UPS compounded the negative sentiment by declining to issue full-year forecasts, with management explicitly citing policy uncertainty. The logistics giant's shares tumbled 10.6%, reflecting broader concerns about the impact of trade disruptions on global supply chains.

​Fed decision takes centre stage amid shifting expectations

​All eyes now turn to the Federal Reserve's (Fed) upcoming decision, with markets widely expecting rates to remain unchanged. However, traders will be scrutinising every word from Fed Chairman Powell for clues about the timing of potential rate cuts.

​Recent labour data and inflation readings have complicated the Fed's path forward. While some indicators suggest the central bank may have room to ease policy, persistent price pressures in certain sectors could prompt a more cautious approach.

​The central bank's commentary on trade policy impacts will also be closely watched, particularly given the ongoing uncertainty surrounding tariff negotiations.

​Asian markets edge higher despite earthquake concerns

​Asian equities managed modest gains despite a major earthquake in Russia's Far East region that sent safe-haven currencies higher. Korean and Australian markets led the advance, though gains remained subdued.

​The Japanese yen and Swiss franc both strengthened following the seismic activity, reflecting the typical flight-to-quality response during periods of uncertainty. Oil prices also rose, though Treasury yields hit four-week lows as investors positioned defensively.

​Chinese markets showed resilience ahead of crucial trade talks, though the lack of breakthrough in Stockholm negotiations has tempered optimism. With the tariff deadline of 12 August fast approaching, markets remain on edge about potential escalation.

​The mixed Asian performance suggests investors are adopting a wait-and-see approach ahead of the Fed decision and key earnings from megacap technology companies.

​FTSE 100 pressured by banking heavyweight HSBC

​The FTSE 100 fell 0.4% as HSBC's disappointing results weighed heavily on the index. The banking giant's shares suffered their worst decline since April after profit fell short of estimates, hit by restructuring costs and charges related to its Chinese operations.

​HSBC's troubles were compounded by news of a probe into its Swiss private banking business over alleged money laundering. The bank's significant weighting in the index meant its decline dragged the broader market lower.

​However, GlaxoSmithKline (GSK) provided some relief with a 2% jump after the pharmaceutical company raised its outlook to the top end of guidance ranges. The contrast between the two heavyweight stocks highlighted the divergent fortunes across sectors.

​Mixed fortunes across UK corporates as earnings deluge continues

​Beyond the banking sector drama, UK companies delivered a mixed bag of results that highlighted the varied challenges facing different industries. BAE Systems raised guidance on strong defence spending but paradoxically saw shares fall 2.9%, suggesting investors had already priced in the upgrade.

​Rio Tinto epitomised the struggles facing commodity producers, with underlying profit down 16% as trade uncertainties cast shadows over demand. The mining giant's weaker dividend also disappointed income-focused investors, reflecting the sector's cautious approach amid global economic uncertainty.

​Aston Martin's woes continued as the luxury carmaker lowered its 2025 outlook, explicitly citing US tariff disruption. The company's struggles highlight how even niche manufacturers cannot escape the broader trade tensions affecting global markets.

​Elsewhere, Taylor Wimpey faced investor scrutiny over cladding provisions that contributed to a first-half loss, putting the rest of the housebuilding sector under pressure.