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GLOBAL MARKETS-Stocks take a breather as markets brace for tech earnings, rate verdicts
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GLOBAL MARKETS-Stocks take a breather as markets brace for tech earnings, rate verdicts
Oct 28, 2025 5:58 AM

*

Global shares pause near records

*

Hopes for bumper tech earnings underpin equity gains

*

Bond bulls see rate cuts in US, Canada and a hold in

Japan, euro

zone

*

Gold below $4,000/oz as hot money leaves the bubble

(Updates for early European afternoon trading)

By Samuel Indyk and Wayne Cole

LONDON, Oct 28 (Reuters) - Global shares paused their

rally on Tuesday after recent hefty gains as expectations for a

thawing in global trade tensions kept risk appetite keen, while

the bull run in tech stocks counted on a bumper round of

mega-cap earnings this week.

The likelihood of lower borrowing costs in the U.S. and

Canada this week supported bonds and kept the dollar pinned as

investors waited to see just how dovish the Federal Reserve

might be on the outlook.

Safe-haven gold, meanwhile, fell back below $4,000 an

ounce as a drop of almost 10% in six sessions squeezed leveraged

money out of what were very crowded trades.

"There is a fundamental reason why gold has gone up and that

is mostly demand from central banks," said George Lagarias,

chief economist at Forvis Mazars.

"What we're seeing is a very natural and, dare I say,

welcome correction. The market needs to cool off and proceed at

a more natural pace," he added.

STOCKS PAUSE AFTER RECORDS

Several global share markets that have recently surged to

all-time highs took a breather on Tuesday.

Europe's STOXX 600 was down 0.2% after hitting a

lifetime high on Monday. Major bourses in Frankfurt and

Paris were close to unchanged on the day, while

Britain's FTSE 100 edged up to a new peak.

Spain's IBEX also inched up to touch a new record,

surpassing its previous peak at the onset of the financial

crisis in 2007.

S&P 500 futures and Nasdaq futures were a

touch higher heading towards the Wall Street open.

"Investors are moving with a little more caution on Tuesday

as there are significant risk events ahead, including the FOMC

meeting and the start of the MAG7 earnings reports," said

Daniela Hathorn, senior market analyst at Capital.com.

"The outlook for equities is going to depend largely on how

these factors interact, with a confirmation from the Fed of

future cuts and a positive guidance outlook from the MAG7 as the

ideal scenario for more upside."

There are lofty expectations for the "Magnificent Seven"

tech heavyweights reporting this week, with Microsoft ( MSFT ),

Alphabet, Apple ( AAPL ), Amazon ( AMZN ) and Meta

Platforms ( META ) all needing strong results to justify

stretched valuations.

Japan's Nikkei eased 0.6%, having surged 2.5% on

Monday as a rally in all things tech lifted it to gains of

almost 27% so far this year.

Japan's new Prime Minister Sanae Takaichi met U.S. President

Donald Trump in Tokyo to discuss defence ties, trade and a

package of investments in the U.S. under a $550 billion deal

struck earlier this year.

MSCI's broadest index of Asia-Pacific shares outside Japan

edged down 0.6%, while Chinese blue chips

slipped 0.2%. The Shanghai Composite Index

cracked the 4,000 level for the first time since mid-2015,

although it closed below.

FED TO CUT RATES

In bond markets, 10-year Treasury yields fell to

3.99% as investors await Wednesday's Fed meeting. A

quarter-point rate cut is considered a done deal, with the real

focus on whether the Fed validates market pricing for a December

easing as well.

"It is a given that we see a rate cut," Forvis Mazars's

Lagarias said.

"The questions for me are: will the Fed signal its

intentions for December and will we see further dissent towards

lower rates apart from Stephen Miran?"

There are also some expectations the Fed will end the

rundown of its balance sheet, otherwise known as quantitative

tightening.

Canada's central bank is also expected to cut rates this

week, while the European Central Bank and the Bank of Japan are

seen holding steady.

The BOJ is likely to debate whether conditions are right to

resume rate hikes as worries about a tariff-induced recession

ease, but political complications may keep it on hold for now.

The yen strengthened as U.S. Treasury Secretary Scott

Bessent called for "sound monetary policy" during a meeting with

Japanese counterpart Satsuki Katayama. The dollar was last down

0.5% to 152.11 yen, having stopped short of the recent

153.29 peak on Monday.

The euro nudged up to $1.1652. The dollar index

eased to 98.74, but remained well within the recent

trading range.

In commodity markets, oil prices eased on a Reuters report

that eight OPEC+ nations are leaning towards making another

modest increase in oil output for December when they meet on

Sunday, as Saudi Arabia pushes to reclaim market share.

Brent dropped 1.2% to $64.83 a barrel, while U.S.

crude eased 1.1% to $60.61 per barrel.

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