Stock markets end week mixed as investors brace for interest rate decisions

An electronic stock board showing Japan's Nikkei 225 index at a securities in Tokyo. Asian markets ended the week with mixed results on Friday. AP

Global stock markets closed with mixed results on Friday as investors braced for next week's interest rate decisions from global central banks.

Wall Street eked out a gain at the end of the trading week following a decline on Thursday, as traders looked forward to monetary policy decisions from the US Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan.

Central banks have continuously raised rates to combat high inflation. However, some analysts, and even former Fed chairman Ben Bernanke, believe that the expected rate rise by the US central bank would be its last in this tightening cycle because of easing price pressures.

“Bonds fell as unemployment claims unexpectedly fell in the US. That strengthened the Fed hawks’ hand on the reasoning that the US jobs market just won’t loosen and challenge the latest expectation where investors and economists, including Mr Bernanke, think that the Fed’s next week rate rise will also be its last,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note.

“There is no expectation of another rise in September, while some 20 per cent predict that there could be another rise in November. The rising question is, when will the Fed start cutting rates, in January, or in March? It will depend on inflation, really.”

US stocks were weighed by a slowdown in technology stocks after Tesla and Netflix reported their second-quarter results.

Tesla, the world's biggest electric car maker, on Wednesday said that it posted a 20 per cent rise in annual net profit and delivered a record number of cars, but chief executive Elon Musk said that vehicle production would slow down during the third quarter because of shutdowns for factory improvements.

Its stock dropped 4.2 per cent after the earnings report, and settled about 1.1 per cent lower on Friday.

Shares of Netflix, the world's largest streaming service, dropped 8.3 per cent in after-hours trading on Wednesday after it reported an annual 3.3 per cent jump in its net profit but fell short of analysts’ sales expectations.

Google parent Alphabet, Microsoft and Facebook owner Meta Platforms are all scheduled to report earnings next week.

“Company earnings could also contribute to the volatility. The market has benefited until now from the surge in interest in AI as well as hopes of a softer monetary policy stance,” said Bas Kooijman, chief executive and asset manager of DHF Capital.

“The tech sector is also seeing some mitigated earnings from Tesla and Netflix and could look forward to Alphabet’s and Microsoft’s results next week for potential support.”

On Wall Street, the S&P 500 and the Dow Jones Industrial Average both inched up by less than 0.1 per cent, with the Dow barely notching its 10th consecutive weekly increase. The S&P 500 has gained in eight out of the last 10 weeks.

The tech-heavy Nasdaq Composite, however, slid 0.2 per cent, a day after it posted its biggest loss in four months.

In Europe, London's FTSE 100 settled 0.2 per cent higher and Paris' CAC 40 added 0.7 per cent, while Frankfurt's Dax shed 0.2 per cent.

Earlier, in Asia, Tokyo's Nikkei 225 closed 0.6 per cent lower and the Shanghai Composite lost 0.1 per cent, while Hong Kong's Hang Seng index gained 0.8 per cent.

In commodities, oil prices settled higher on Friday and posted a fourth straight weekly gain as falling crude stocks offset demand concerns.

Brent added 1.8 per cent, or $1.43, to close at $81.07 a barrel, while West Texas Intermediate rose 1.88 per cent, or $1.42, to settle at $77.07.

Gold, meanwhile, fell about 0.2 per cent, or $4.30, to close at $1,966.60 an ounce.