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Swiss Blue-chip Index Slips; Economic Outlook Improves

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Swiss equities remained in negative territory on Thursday, with the Swiss Market Index down 0.65% at closing, as investors assessed a slew of earnings reports and key economy-related data releases.

Switzerland's KOF Economic Barometer increased to 103.5 points in July from the revised 102.1 points in June, mainly reflecting positive developments in the majority of the production side indicators.

"After rising slightly above its average for the first time since the beginning of the year in the previous month, the Economic Barometer continues to remain above its medium-term average. The improved outlook for the Swiss economy is reinforced," according to the KOF Swiss Economic Institute.

Meanwhile, residential property prices in the country rose 0.7% in the second quarter, compared with the prior three-month period, with higher prices for condominiums. On a yearly basis, the Swiss Residential Property Price Index climbed 3.5%.

Elsewhere, the euro area's seasonally adjusted gross domestic product edged up 0.4% in the second quarter, following a revised zero growth in the previous quarter, Eurostat's flash data showed. On the regulatory front, the Bank of England left its bank rate unchanged at 3.75%, after its monetary policy committee voted 6-3 in favor of a hold.

Back home and in corporate news, Bachem's (BANB.SW) group sales reached 326.4 million francs in the first half, up from the year-ago 313 million francs, while net income rose to 50.3 million francs from 50.1 million francs. The peptides and oligonucleotides manufacturer expects full-year 2026 sales growth of between 35% and 40% in local currencies. The stock added 4.62% at the end of the trading day.

On the flip side, machinery industry company Bucher Industries (BUCN.SW) shed 5.22% as it recorded a 38.5% year-over-year drop in first-half profit to 88 million francs, weighed down by overall lower capacity utilization and restructuring costs at its Bucher Specials business. Net sales also fell over the period to 1.47 billion francs from 1.54 billion francs.

"As expected in our Week Ahead publication, the group has downgraded its guidance. The company now expects sales to be slightly lower on a comparable basis (previously expected to be stable), while the operating profit margin is expected to be below the prior year's level (previously expected to be in line with the prior year)," said analysts at AlphaValue/Baader Europe. "We expect a negative market reaction and reiterate our Reduce recommendation, as the company continues to be significantly impacted by weakness across most of its end markets."

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Update: US Equity Indexes Slide as Divided Fed Reiterates Inflation Focus, Trump Vows to Hit Iran Hard in Retribution Move

(Updates with index/price moves and Federal Reserve/geopolitical news from the first paragraph.)US equity indexes sank as the Federal Reserve reiterated its unflinching focus on inflation after three dissenters accompanied the fifth consecutive policy hold and as President Donald Trump promised to hit Iran hard following Tehran's attack on regional neighbors.The Dow Jones Industrial Average plunged 2.2% to 51,594.14, with the Nasdaq Composite down 1.7% to 24,442.94 and the S&P 500 lower by 1.5% to 7,316.15 on Wednesday.All sectors declined, except energy, consumer staples, and communication services. Industrials, technology, and financials led the steepest decliners.The CBOE's volatility index VIX, also known as the fear gauge, surged 14% to 20.66.The Fed held its policy rate steady in a divided decision, as three officials called for policy tightening. The Federal Open Market Committee maintained the target range for the federal funds rate at 3.50% to 3.75%. The committee reiterated its pledge to "deliver price stability" as inflation remained above the 2% target amid supply shocks."Let me reiterate. There is no soft inflation target. There is no soft implicit target. Not on this committee's watch. There's only a target and it's 2%," Fed Chair Kevin Warsh said.Following the FOMC statement, the Fed Funds futures market shifted "slightly," Raymond James said in a note. For the December meeting, the probability of an unchanged Fed Funds rate decreased to 8.4% on Wednesday from 11.0% on Tuesday; the probability of a 25-basis-point increase in rates climbed to almost 92% from over 89%, and the likelihood of two 25-basis-point moves was little changed at 53.0%.A drone hit a US-owned gas storage tanker at Egypt's Mediterranean port of Damietta, British maritime security firm Ambrey said in an initial assessment on Wednesday, Reuters reported.President Donald Trump vowed to retaliate against Iran for firing on US troops days after he halted air strikes, the news report said. "So it's our turn," Trump was cited as saying at the White House. He said Washington would see if there was an agreement with Iran at some point, "but we're going to hit them very hard."Yemen's Houthi group is considering imposing fees on commercial ships sailing through the southern Red Sea, a week after declaring a naval blockade on Saudi Arabia, regional sources with knowledge of the matter told Reuters. The Red Sea chokepoint is a critical export route for Saudi crude as maritime traffic remains disrupted at the Strait of Hormuz, a waterway through which about a fifth of global oil and gas flows.The front-month US West Texas Intermediate jumped 6.8% to $84.66 a barrel and global benchmark North Sea Brent surged 7.8% to $90.66 a barrel after the US Central Command said it joined Saudi Arabian Armed Forces to conduct strikes in Iraq against Iran-aligned terrorists that the Islamic Revolutionary Guard Corps directed to attack US forces and Saudi energy infrastructure.US Treasury yields were mixed, with the 10-year surging 7.7 basis points to 4.68% while the two-year was little changed at 4.27%.In precious metal markets, gold futures climbed 0.7% to $4,066.1, and silver futures rose 0.6% to $57.84.

Dow JonesNasdaq CompositeS&P 500
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Update: US Equity Indexes Slump Ahead of Fed Policy Moves, Big-Tech Results; Crude Oil Soars as Trump Vows to Hit Iran Hard

(Updates with index/price moves and Fed/company/geopolitical news from the first paragraph.)US equity indexes fell amid expectations of a tightening bias from the Federal Reserve and as Iran's surprise missile attack on regional neighbors escalated war tensions ahead of big-tech quarterly results post-bell.The Dow Jones Industrial Average declined 1.4% to 51,986.1, with the Nasdaq Composite down 0.7% to 24,697.2 and the S&P 500 lower by 0.7% to 7,376.8 after midday Wednesday. All sectors except energy, consumer staples, and consumer discretionary declined. Industrials, materials, and technology led the steepest decliners.Microsoft (MSFT), Meta Platforms (META), Lam Research (LRCX), Arm (ARM), and Qualcomm (QCOM) will report earnings after the bell on Wednesday, and investors will focus on what these companies will say about capital expenditures related to artificial intelligence and the state of free cash flows.Among companies with a market capitalization of more than $200 billion, eight of the 10 worst intraday performers were from the technology sector, according to data compiled by Finviz. VanEck Semiconductor ETF (SMH), with net assets of $77.2 billion, slumped 3.1% after midday.The Fed is likely to remain on hold at the 3.5% to 3.75% target range in its Wednesday policy announcement, according to the CME FedWatch tool. However, the probability that the target rate for fed funds will increase to 4.25%-4.5% in December jumped to 17% as of Wednesday afternoon from 9% a month ago, implying a significant tightening bias among some market participants.The tightening bias may have to be communicated more subtly through a more casual or veiled tone, Thierry Wizman, global foreign-exchange and rates strategist at Macquarie, said in a note. Alternatively, Fed Chair Kevin Warsh may have to accommodate the views of the more hawkish majority in his press conference on Wednesday by making his views more strident about promoting price stability "without delay," he said."And if that isn't enough, the more hawkish bias will spill out more forcefully in the comments and appearances by Fed officials in the days after today's FOMC meeting," Wizman said in the note. "But one way or another - including, perhaps, through dissent - the Fed's emerging tightening bias will find its way into the market today or the next few days."In geopolitical news, President Donald Trump said Iran will be hit hard, according to Fox News.The US Central Command said it joined Saudi Arabian Armed Forces to conduct strikes in Iraq against Iran-aligned terrorists that the Islamic Revolutionary Guard Corps directed to attack US forces and Saudi energy infrastructure.The front-month US West Texas Intermediate jumped 6.8% to $84.63 a barrel, and global benchmark North Sea Brent surged 7.6% to $90.45 a barrel.US Treasury yields jumped, with the 10-year up 3.5 basis points to 4.64% and the two-year higher by 4.5 basis points to 4.32%.In precious metal markets, gold futures were steady at $4,039.2, and silver futures rose 0.8% to $57.99.

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Asia Markets

Exchange-Traded Funds, US Equities Lower After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV were lower. Actively traded Invesco QQQ Trust (QQQ) fell 1.4%.US equity indexes fell amid expectations of a tightening bias from the Federal Reserve and as Iran's surprise missile attack on regional neighbors escalated war tensions ahead of big-tech quarterly results post-bell.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) rose about 2.1% each.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) shed 1.8%; iShares US Technology ETF (IYW) fell 1.4%, and iShares Expanded Tech Sector ETF (IGM) was down 1.5%.The State Street SPDR S&P Semiconductor (XSD) slipped 4.4%, and iShares Semiconductor (SOXX) fell 4.5%.FinancialThe State Street Financial Select Sector SPDR (XLF) dropped 0.9%. Direxion Daily Financial Bull 3X Shares (FAS) declined 2.6%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), gained 2.5%.CommoditiesCrude oil gained 6.6%, and the United States Oil Fund (USO) increased 7%. Natural gas rose 0.8%, and the United States Natural Gas Fund (UNG) moved 1.6% higher.Gold on Comex fell 0.2%, and the State Street SPDR Gold Shares (GLD) increased 0.1%. Silver was up 1%, and iShares Silver Trust (SLV) gained 1.1%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) was up 0.7%. The Vanguard Consumer Staples ETF (VDC) added 0.6%, and iShares Dow Jones US Consumer Goods (IYK) was up 0.3%.The State Street Consumer Discretionary Select Sector SPDR (XLY) edged higher. VanEck Retail ETF (RTH) added 0.2%, and the State Street SPDR S&P Retail (XRT) gained 0.3%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) fell 0.1%, while iShares US Healthcare (IYH) and Vanguard Health Care ETF (VHT) dropped 2% each. IShares Biotechnology ETF (IBB) was down 1%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) slipped 2.8%. Vanguard Industrials Index Fund (VIS) was down 2.9% and iShares US Industrials (IYJ) declined 2%.CryptocurrencyIn midday activity, bitcoin (BTC-USD) fell 0.3%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) was fractionally lower, ProShares Ether ETF (EETH) was down 1.4%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) was unchanged.

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