OpenAI is taking its AI infrastructure strategy global, with a major investment in Europe’s north.

The firm, known for developing ChatGPT, will become the primary capacity buyer in a new Stargate-branded data centre planned for northern Norway.

In partnership with British tech infrastructure firm Nscale and Norwegian energy giant Aker, the project will deploy 100,000 NVIDIA GPUs by the end of 2026.

This marks OpenAI’s first major data centre deployment in Europe. The Norway build is also part of a broader sovereign AI push across the continent, as governments seek more local control over where and how artificial intelligence workloads are handled.

Norway site to use 230MW of hydropower

The data centre will be based in Kvandal, near Narvik in Norway’s far north. According to the companies, the region has several advantages, including low electricity demand, limited transmission bottlenecks, and access to abundant hydropower.

The facility is expected to start with a capacity of 230 megawatts, placing it among Europe’s largest AI data centre projects.

Both Nscale and Aker have committed approximately $1 billion each to the initial 20-megawatt development phase. The total GPU count is expected to reach 100,000 within two years, with further capacity expansions planned.

Nvidia’s chips have become the go-to solution for handling complex AI tasks in data centres. The project will rely on these GPUs to deliver the computing power required for generative AI applications.

Stargate enters Europe with $2B plan

The Stargate project was first introduced in the US earlier this year, with OpenAI, Oracle, Japan’s SoftBank, and UAE-based MGX as core partners.

Together, the group aims to invest $500 billion over the next four years to create a global AI infrastructure network.

June saw OpenAI and its partners announce plans for a Stargate campus in the UAE. The Norway data centre follows closely on that announcement, indicating an accelerating global rollout.

Unlike the UAE plan, however, this project will specifically target the European sovereign AI initiative, where AI services must operate under local data residency requirements.

The Stargate-Norway collaboration aligns with that push, with OpenAI set to act as an “off-taker”—buying significant computing capacity from the data centre without directly operating it.

Nscale leads OpenAI-backed build

British firm Nscale will design and construct the Norwegian data centre in a 50-50 joint venture with Aker. While OpenAI won’t own or run the facility, the company plans to use the computing power to expand its AI services on the continent.

Nscale CEO Josh Payne stated that the aim is to deliver European “sovereign compute” infrastructure that AI developers across the region can use to build productivity tools and commercial products.

Although he declined to reveal the exact financial structure or expected returns, Payne said Nscale has a separate European expansion roadmap beyond Stargate.

Currently, there are no additional Stargate sites announced for Europe. However, the push for increased capacity across fragmented EU countries may open doors for more large-scale AI infrastructure investments.

Nvidia, for instance, is also working with French AI firm Mistral to deliver new GPU-backed data centres in France.

Europe pushes for sovereign AI growth

The Stargate launch in Norway comes at a time when Europe is stepping up efforts to secure its digital future. Calls for sovereign AI infrastructure have grown louder, especially as American and Asian tech giants extend their footprint into the region.

Nvidia CEO Jensen Huang, during a visit to Europe earlier this year, encouraged EU governments to build their own AI ecosystems. Sovereign AI is increasingly seen as essential for data control, economic independence, and technological leadership.

For OpenAI, this Norway project offers an opportunity to extend its reach while aligning with European policy demands.

By sourcing green energy and keeping workloads on EU soil, the company positions itself as a partner rather than just a service provider in the region’s AI future.

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North America’s UAV (drone) market is undergoing a rapid transformation, fuelled by breakthroughs in AI, autonomous flight, and regulatory shifts aimed at reducing dependence on Chinese technology.

In a bold move to rebuild the domestic drone sector, the US government is crafting an ambitious industrial policy—echoing the intent of the CHIPS Act—to boost homegrown production, protect national security, and regain control of the skies.

Drones manufactured by Chinese drone giant DJI (Da Jiang Innovations) already face increasing regulatory and legislative pressure that puts its future in the US market at risk.

This overall policy momentum has caught the attention of investors. Peter Thiel’s Founders Fund has poured over $1 billion into Anduril Industries, a US defence tech firm specialising in AI-enabled drones.

The US drone market is expected to generate $1.39 billion in revenue in 2025, with a projected annual growth rate of 2% through 2030.

The scale still remains modest: around 500 companies manufacture fewer than 100,000 drones a year, according to the Association for Uncrewed Vehicle Systems International.

However, the integration of artificial intelligence (AI) into unmanned aerial vehicles (UAVs) is also emerging as a major driver of domestic drone innovation and manufacturing growth.

“AI is a rapidly evolving tool, and many companies have already begun integrating AI programs into UAVs,” Bill Irby, CEO of AgEagle Aerial Systems (Nasdaq: UAVS), a US-based global provider of full-stack drone solutions in the energy, construction, agriculture, and government verticals, tells Invezz in an interview.

Irby also talks about promising emerging markets for the company, key milestones for investors to watch out for in the second half of the year, and consolidation in the drone industry.

Excerpts:

Bill Irby, CEO, AgEagle Aerial Systems

On integrating AI in UAVs and managing related risks

Invezz: You recently partnered with an Israeli firm to advance AI-powered autonomous drone teaming, which you said can be used for border security, surveillance, and other applications. What’s your view on integrating AI in UAVs, and how do you minimise related risks?

AI is a rapidly evolving tool, and many companies have already begun integrating AI programs into UAVs.

We believe that in order to integrate AI successfully and without risk, you need to introduce a mature algorithm that has been tested in a variety of scenarios.

It is also important to be strategic about what tasks you deploy AI programs to achieve.

For example, any action that typically involves “man-in-the-loop” decision making, control, or processing can benefit from AI.

Take UAS direct control as an example: being a pilot involves the monitoring of a number of inputs, visual and auditory, including airspace awareness, instrument readings, weather, etc., then processing all this information to make decisions and act.

These observations and actions can be made much more quickly and reliably with AI acting in place of the pilot.

India and Thailand emerge as promising markets

Invezz: You recently announced your 100th drone sale in South Korea, bolstering your presence in the Asia Pacific market. What other markets seem promising from an export perspective?

The single most promising market that AgEagle is newly entering is India, particularly in the agricultural market.

We are engaging in an agreement there and also building similar opportunities in Thailand.

Invezz: How do you anticipate the FAA’s upcoming Part 108 (BVLOS) rule will change the operational landscape for drone companies in the US?

The FAA’s upcoming Part 108 (BVLOS) rule is expected to significantly expand opportunities for drone companies in the US by streamlining operations.

Rather than requiring individual waivers for each beyond visual line of sight (BVLOS) flight, operators will be able to obtain certification under Part 108, allowing for more consistent and scalable deployment.

The rule will also define clear operational corridors and flight parameters, such as altitude limits, helping to establish a standardised regulatory framework that enhances both safety and efficiency across the industry.

We believe it will have a significant impact on the market overall.

On the US’ attempts to reduce reliance on Chinese drones

Invezz: The US government is pushing to reduce reliance on Chinese drone manufacturers and ramp up the US drone manufacturing industry. How do you view this, and what opportunities does this open up for AgEagle?

This opens the door for more production in the US and more competition in the industry.

We see this as a market accelerator and will put pressure on companies, like AgEagle, to produce state-of-the-art products.

Invezz: Experts say US drone manufacturers’ heavy reliance on Chinese components means it would take years for the country to build manufacturing infrastructure that could rival China’s. Your comments?

The US government’s commitment to investing in the drone industry will catalyse the growth of the industry here in the US.

It has put a number of grants and benefits in place in order to accelerate the development of this industry, and I do believe that we will see companies respond with urgency.

Gov policy, not tech incapability, behind the failure to catch up with China, Russia in drone making

Invezz: Why do you think the US, despite its technological prowess, has lagged behind Russia and China in a critical sector like drone manufacturing?

The US has lagged behind China and Russia in drone manufacturing largely due to differences in government policy and market dynamics, not a lack of technological capability.

China’s dominance is driven by heavy government subsidies, enabling manufacturers to offer drones at significantly lower prices, often by reverse-engineering Western technology.

Russia’s advancements, meanwhile, have been accelerated by wartime urgency and national defence priorities.

In contrast, the US has only recently begun offering grants and revising procurement policies, particularly within the Department of Defense, to support domestic drone innovation.

With these changes and increased private sector investment in R&D, the US drone industry is now poised for rapid growth.

H2 outlook: US production plans, new launches, orders fromthe French Army to build momentum

Invezz: Can you share updates on AgEagle’s financial health and any growth milestones investors should watch for in the second half of 2025?

AgEagle is making solid progress in 2025, and we’re optimistic about the momentum building in the second half of the year.

While growth is never as fast as we’d like, we’re hitting meaningful milestones, including achieving Blue UAS certification and moving forward with
plans to establish US-based production.

We’re preparing to launch a second domestic manufacturing line, which will enhance our ability to meet growing demand.

We’re also excited about the upcoming release of a new version of our high-performance multispectral cameras coming out, expected in Q3.

Additionally, following our largest order to date from the French Army last year, we’re encouraged by signals of a potential follow-on order.

While not yet finalised, it’s a strong indicator of continued international interest.

Overall, we’re confident in our direction and energised by the opportunities ahead.

On consolidation in the drone industry

Invezz: What are your views on the consolidation taking place in the drone industry, especially as defence and tech firms look to shore up domestic production?

Consolidation in the drone industry is both expected and healthy, especially as defence and tech firms ramp up efforts to strengthen domestic production.

I’ve been predicting this shift for some time, and we’re already seeing it take shape, with several drone company acquisitions announced in just the past few months.

As demand accelerates, particularly from government and defence customers, not all companies will have the resources to scale manufacturing or meet evolving requirements.

This will naturally lead to mergers and acquisitions, much like we saw in a previous wave about eight years ago, when there was a wave of drone startups emerging at the same time.

At AgEagle, we view this as a positive trend that will help strengthen the overall ecosystem, drive innovation, and ensure that the most capable, well-positioned companies thrive.

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Shell announced on Thursday that its second-quarter net profit fell by nearly a third. 

The decline in profit was primarily due to lower oil prices, weaker gas trading results, and losses from its chemicals operations caused by outages, Reuters said in a report. 

Despite these setbacks, the company’s profit still significantly exceeded analysts’ expectations.

The oil major announced its decision to sustain its share buyback program at $3.5 billion for the upcoming three months. This marks the fifteenth consecutive quarter where the buyback program has been maintained at a minimum of $3 billion.

By 0847 GMT, the company’s shares had risen by approximately 1.7%, surpassing the 0.5% increase seen in the wider index of European energy companies.

Earnings

“We definitely saw macro continuing to be challenging on multiple fronts and against definitely a backdrop of geopolitical and economic uncertainty,” Shell’s finance chief Sinead Gorman was quoted in the report.

We saw that knock-on impact on both physical trade flows as well as commodity prices and margins. Despite that, we delivered a robust set of results.

Shell successfully cut costs by $3.9 billion in 2022, contributing to a larger initiative to save between $5 billion and $7 billion by 2028.

Cash flow from operations for the quarter was $11.9 billion, a decrease from $13.5 billion in the prior year.

Shareholder distributions, totaling $2.1 billion in dividends and buybacks, constituted 46% of the operating cash flow over the past four quarters, aligning with the company’s guided range of 40% to 50%.

Shell reported adjusted earnings, or net profit, of $4.264 billion for the quarter. While this figure exceeded the average analyst estimate of $3.74 billion, it represents a 32% decline from the previous year.

The marketing division, encompassing its fuel and charging retail stations, experienced increased margins at the start of the summer driving season.

Oil prices fall

The company had previously indicated, through a trading update, that it anticipated a negative impact on its earnings. 

This was attributed to reduced trading activity in its integrated gas division and financial losses from its chemicals operations, following a shutdown at its US Monaca polymer plant.

Shell is restarting operations at Monaca, despite the general weak demand and margins in the industry. The company is actively seeking new partners or considering selling off some of its chemical assets, according to Gorman.

She said:

Goodness, I feel sorry for the chemical industry. It’s a tough one.

Gorman stated that Shell adopted a cautious, risk-off approach to oil trading during the quarter. This was due to their perception of a disconnect between price movements and the underlying supply-demand fundamentals.

In a contrasting development, rival BP announced a robust performance in oil trading within a pre-release trading update for its second-quarter results, anticipated on August 5.

OPEC’s decision hurts prices

OPEC+, a coalition of the Organization of the Petroleum Exporting Countries and its allies, including Russia, started phasing out its voluntary production cuts. 

These cuts had been implemented to prop up the market, and their reversal led to a decline in crude oil prices during the quarter.

An upcoming decision dictates that oil output will increase by 548,000 barrels per day in August.

Brent crude, the global benchmark, averaged approximately $67 per barrel from April to June. This is a decrease from $75 per barrel in the preceding quarter and $85 per barrel in the same period last year.

In June, prices briefly spiked due to the conflict between Israel and Iran. At the time of writing, Brent crude oil was at $71.85 a barrel, down 0.9% from the previous close. 

Gorman anticipates a potential tightening in LNG markets post-summer. This follows a period in the first half of the year where muted Asian demand allowed Europe to replenish its liquefied natural gas reserves.

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Meta Platforms Inc. delivered robust second-quarter results late Wednesday, sending its stock up nearly 12% in early Thursday premarket trading.

The Facebook and Instagram parent beat Wall Street estimates on both revenue and profit, underlining the strength of its core advertising business and growing investor confidence in its artificial intelligence strategy.

Revenue rose 22% year-on-year to $47.5 billion for the April-June quarter, while net income reached $18.3 billion, exceeding analyst forecasts.

It was one of Meta’s strongest quarters since its pivot to AI began in earnest last year.

The stock, up 16% year-to-date, is now approaching a $2 trillion valuation — a milestone it has never before reached.

The S&P 500, by contrast, has gained 8.42% in the same period.

AI investments show results in ad growth and engagement

Meta’s second-quarter results suggest its heavy investments in artificial intelligence are already yielding benefits, particularly in advertising — the company’s primary source of revenue.

“The investments it’s making in AI are already paying off in its ads business,” said Jasmine Enberg, principal analyst at research firm eMarketer.

Ad impressions were up 11% compared to the year-ago quarter, while the average price per ad increased 9%.

Together, they contributed to the 22% revenue growth from the advertising segment, reaffirming Meta’s dominance in digital marketing.

Meta also reported that users are spending more time on its platforms.

Video viewing time on Facebook and Instagram grew over 20% in the quarter, thanks to improvements in the company’s AI-driven content recommendation systems.

CFO Susan Li said Meta will continue optimizing these models throughout the year to make recommendations more personalized.

Meta tames spending outlook, reassures investors

In a notable shift, Meta did not raise its top-end capital expenditure guidance for the first time this year, helping calm market nerves around CEO Mark Zuckerberg’s ambitious AI spending spree.

Investors viewed this as a signal that Meta may begin reaping returns from its earlier outlays without requiring an immediate hike in spending.

Still, the company remains one of the most aggressive spenders in AI.

Meta has earmarked up to $72 billion in capital expenditures for 2025, primarily focused on AI infrastructure and talent acquisition.

Analysts expect this figure to climb further in the next quarter.

Zuckerberg’s push includes a $14 billion investment for a 49% stake in Scale AI, a data-labeling startup, and the recruitment of its CEO, Alexandr Wang.

The company has also been actively poaching researchers from competitors, including OpenAI.

Reports suggest Meta offered some individuals compensation packages in the hundreds of millions — and in one case, a $1 billion deal.

Reality Labs remains a drag, but not a deterrent

While the core business thrives, Meta’s Reality Labs division remains a financial sore point.

The unit, tasked with building the company’s metaverse products, posted a loss of $4.5 billion for the quarter.

This continues a trend of heavy losses, but analysts say the segment remains immaterial compared to Meta’s broader advertising operations.

Meta management has warned that expense growth will accelerate next year in step with rising capital investments.

This could potentially pressure margins if revenue growth does not keep pace. However, the market currently views Meta’s spending as a justifiable gamble on long-term growth.

Analysts back Meta’s strategy amid broader tech optimism

Meta is the third major tech company to report strong quarterly results this earnings season, following Alphabet and Microsoft.

Alphabet reported record sales and raised capital expenditure guidance by 13%, while Microsoft exceeded expectations, fuelled by 39% growth in its cloud division.

On Wall Street, sentiment toward Meta remains bullish.

Jefferies, TD Cowen, and Canaccord Genuity all reiterated buy ratings with price targets ranging between $875 and $950, representing significant upsides to its current share price of $695.21.

Jefferies said Meta is “well-positioned to capitalize on improving advertiser demand & AI momentum going forward”.

Pivotal Research called the company’s aggressive AI investments “reasonable,” given the size of its revenue gains. It kept a PT of $930 on the stock.

Scotiabank, more cautious, maintained a sector perform rating with a $685 target, warning that Meta must continue ramping up expenses to maintain momentum.

According to Zacks, Meta’s combination of earnings growth, revenue strength, and liquidity puts it among the top choices for institutional investors, calling it a “hedge fund hotel.”

The research firm also emphasized that ad revenue is the most critical metric for evaluating the company’s AI strategy.

“Overall, the core advertising engine is firing on all cylinders, with Meta generating 22% year-over-year growth in the segment,” it said, adding that a reasonable target into 2026 is between $900 and $1,000 per share.

With both impressions and pricing up in Q2, the data suggest AI is having a clear and measurable impact.

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Dow Futures are up about 90 points in early trading on Thursday, pointing to a rebound after yesterday’s pullback.

Strong earnings from Microsoft and Meta are doing the heavy lifting, giving the market something to cheer about.

The S&P and Nasdaq hit fresh records, so there’s some momentum, but the mood’s still cautious.

Global markets are all over the place, trade tensions are hanging in the air, and inflation data later today could shake things up. More earnings are coming too, so this rally’s got a few hurdles to clear.

5 things to know before Wall Street opens today

1. Strong earnings from Microsoft and Meta Platforms have sent S&P 500 and Nasdaq futures to record levels. Meta surged over 12% premarket after projecting better-than-expected Q3 revenues, citing AI-fueled growth in its ad business.

Microsoft’s Azure cloud results and capital spending forecasts also beat estimates, spurring an 8% stock jump and positioning Microsoft for a $4 trillion market cap for the first time.

2. The Federal Reserve kept rates unchanged, with Chair Jerome Powell signaling it is “premature” to expect a rate cut at the next September meeting despite positive US GDP data.

Investors will closely watch today’s release of the Fed’s preferred inflation gauge, the PCE index, which could influence rate expectations further. Markets currently price in about a 57% chance of a rate cut in September.

3. President Trump announced a 25% tariff on Indian goods starting Friday and warned of additional penalties linked to India’s Russian oil imports.

Meanwhile, the US reached a 15% tariff deal with South Korea as part of a new trade agreement. European spirits exports to the US may face new tariffs if further deals aren’t made.

4. While US tech stocks are rallying, broader markets remain mixed amid trade tensions and the monthly options expiry.

The India Sensex and Nifty fell in response to tariff news, and volatility gauges ticked higher.

Bank of America strategists suggest hedging for August, historically a turbulent period for US equities.

5. Besides Big Tech, investors await results from major names like Apple and Amazon later today, plus economic data including initial jobless claims and the critical PCE inflation report.

These could shift market direction as they reveal the health of both the US consumer and corporate sector.

Apple is on deck to report later today, with Wall Street looking for modest growth. Q3 earnings per share are expected to land between $1.42 and $1.43, and revenue is pegged around $89 billion, right in line with the company’s guidance for low to mid-single-digit gains.

Amazon’s numbers are expected to show a bit more juice: $162.1 billion in revenue, up 9.5% from a year ago, with EPS seen at $1.33, a 5.6% bump.

With Amazon shares up roughly 44% since April, this report is being watched closely, not just for what it says about the company, but as a broader read on the health of e-commerce and cloud computing.

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Union Pacific Corp (NYSE: UNP) announced a blockbuster merger that values each share of peer Norfolk Southern Corp (NYSE: NSC) at $320 – huge premium on its previous close – on Tuesday.

Still, NSC shares ended lower today reflecting investors remain cautious on the first mega railroad consolidation since 1999.

Despite headline valuation, skepticism around regulatory approval and labour resistance weighed on Norfolk Southern stock on July 29^th.  

Norfolk Southern stock sinks on regulatory uncertainty

Investors are staying clear of NSC stock despite merger news primarily because they’re not entirely convinced the $85 billion agreement will survive regulatory scrutiny.

The Surface Transportation Board (STB), which oversees rail mergers, has historically been hostile to Class I consolidations.

The last serious attempt at a major merger within this space (Burlington Northern and Canadian National in 1999) triggered a moratorium that lasted years – and investors fear a repeat with NSC-UNP deal.  

While both Union Pacific and Norfolk Southern argue the deal will enhance efficiency and service, markets are wary of prolonged delays or outright rejection, which could derail premium valuation and leave Norfolk Southern shares exposed.

Labour resistance remains an overhang on NSC shares

Compounding regulatory concerns is the looming challenge from the rail industry’s largest union – SMART Transport Division (SMART-TD).

SMART-TD has already signalled plans of opposing the Union Pacific-Norfolk Southern deal due to potential job losses, operational disruptions, and weakened bargaining power.

Labor groups have grown increasingly vocal in recent years – and their influence on regulatory outcomes has strengthened.

A formal challenge could further complicate the approval process, especially if it triggers hearings or public opposition campaigns.

Investors are pricing in the significant risk that union resistance could either delay the merger or force concessions that dilute its financial appeal – adding another layer of uncertainty to Norfolk Southern stock price.

Are these concerns overblown?

According to Donald Broughton, the aforementioned concerns may be overblown, and the Union Pacific-Norfolk Southern deal will clear regulatory and labour-related hurdles.

In a CNBC interview today, he argued the financial conditions, such as overleveraged balance sheet of railroad firms that stood in the way of such deals in the past, have been resolved.

More importantly, the Union Pacific management, particularly Jim Vena, its chief executive, has deep experience in leading acquisitions and successfully negotiating with labour unions, Broughton added.

All in all, since NSC shares are currently trading at about $277 – well below the merger price, this classic merger arbitrage setups spells opportunity for those betting on the NSC-UNP deal going through despite near-term regulatory and labour headwinds.

Note that Wall Street analysts also currently have a consensus “overweight” rating on shares of Atlanta headquartered Norfolk Southern Corp, which currently pay a dividend yield of 1.95% as well.

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The ASX 200 Index continued its strong rally this month. It has jumped in the past four consecutive months, reaching a record high of A$8,776, up by over 22% from the lowest level in April.

Australia inflation and RBA decision

The ASX 200 Index continued its strong rally after Australia published the latest consumer price index (CPI) data on Wednesday. 

This report showed that the headline consumer inflation rose 0.7% in the second quarter and 2.1% annually. The CPI has been in a strong downtrend after peaking at 7.8% after the COVID-19 pandemic and is now hovering near the lowest level since the March 2021 quarter. 

This annual inflation figure moved to 2.1%, down from 2.4% in the first quarter as it continues to near the RBA’s target of 2.0%. This inflation dropped because of a sharp decline in automotive fuel prices, but was offset by an increase in food inflation.

Additional inflation data revealed that the weighted mean CPI decreased from 2.9% in Q1 to 2.7% in Q2, while the trimmed mean figure also dropped to 2.7%. These numbers are important because they trim the most volatile items. In a statement, a Bloomberg analyst said:

“In our view the latest inflation reading points to the RBA continuing with a gradual pace of easing. We expect 25-bp rate cuts in August and November, with further easing to follow in 2026.”

Australia stocks and bonds

The ASX 200 Index jumped due to rising hopes that the RBA will cut interest rates at its upcoming August meeting. Rate cuts incentivize more people to invest in the stock market as the bond market returns fall.

Data shows that Australian 10-year bond yields dropped to 4.271%, down from this month’s high of 4.440%. It has moved from last year’s high of 4.72% as interest rates have fallen. 

Most Australian stocks rose in the green this week. The Pilbara Minerals share price jumped by 5.52% on Wednesday, while banks like Commonwealth Bank of Australia (CBA), Westpac Banking, Bank of Queensland, and National Australian Bank (NAB) jumped by over 2%.

The next key catalyst for the ASX 200 Index will be the upcoming Federal Reserve interest rate decision. Economists believe that the bank will leave interest rates unchanged.

ASX 200 Index technical analysis

ASX 200 Index chart | Source: TradingView

The daily chart shows that the ASX 200 Index has been in a strong bull run in the past few months. It moved from a low of A$7,145 in April to the all-time high of A$8,768. 

The index has moved above the important resistance level at A$8,623, the highest swing on February 25. It has moved above the 50-day and 200-day Exponential Moving Averages (EMA). 

The Relative Strength Index (RSI) and the Stochastic Oscillator have all pointed upwards. It has also moved to the ultimate resistance of the Murrey Math Lines at $8,750. 

The potential target of the ASX 200 Index will be the extreme overshoot point at A$9,062, up by 3.8% from the current level. A move below the support at A$8,623 will invalidate the bullish view. 

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Asian stock markets began Wednesday’s session with a modest and cautious advance, as investors held their breath ahead of a crucial policy announcement from the US Federal Reserve.

The market mood was also shaped by the conclusion of trade talks between the US and China, which ended without any substantive agreement, leaving the global trade landscape in a state of continued uncertainty.

A sense of anticipation is palpable across trading floors today. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%, led by gains for Taiwanese stocks.

This followed a session of mild losses for US stocks as traders braced for a slew of major corporate earnings reports. Australian shares were up 0.7%, while Japan’s Nikkei stock index slid a marginal 0.03%, and Hong Kong’s Hang Seng Index skidded 0.4%.

Investors are preparing for a packed few days of market-moving events. Several central bank decisions are on the docket, along with key economic reports and a fresh wave of corporate earnings, all culminating in US President Donald Trump’s fast-approaching August 1 tariff deadline.

The main event today will be the conclusion of the Federal Reserve’s policy meeting.

The central bank is widely expected to leave its interest rates unchanged, though the decision could see a rare dissent from some officials who are in favor of lowering borrowing costs.

“With labour market conditions near full employment, most Fed officials want to wait and see how tariffs impact inflation,” said Tom Kenny, senior international economist at ANZ in Sydney, on a podcast.

He noted that some officials are concerned that tariffs could drive higher inflation expectations, leading to more persistent price pressures rather than just a one-off hit. “Our expectation is that the Fed should be in a position to cut rates at the September meeting,” Kenny added.

In the bond market, US Treasury bonds advanced ahead of the Fed’s meeting, pushing yields to their lowest level in almost four weeks.

This came after a strong auction of seven-year notes helped to quell concerns about diminishing demand for US government debt. The yield on the benchmark 10-year Treasury note was last at 4.328%, its lowest level since July 3.

The trade talk tightrope: no breakthroughs as deadlines near

The high-stakes trade talks between US and Chinese officials concluded on Tuesday with an agreement to seek an extension of their 90-day tariff truce, but no major breakthroughs were announced.

US officials have stated that it is now up to President Trump to decide whether to extend the trade truce, which expires on August 12, or to potentially let tariffs shoot back up to triple-digit figures.

Other nations are also in a race against the clock. India is reportedly bracing for higher US tariffs—likely to be between 20% and 25%—on some of its exports, as it holds off on making fresh trade concessions ahead of the August 1 deadline, according to two Indian government sources.

Meanwhile, three South Korean cabinet-level officials met with US Commerce Secretary Howard Lutnick in a last-ditch effort to secure a deal for their country.

In Japan, the focus will be on the Bank of Japan’s policy meeting on Thursday.

The central bank is expected to hold its policy steady, but investors will be scrutinizing its comments to gauge when the next rate increase might come, especially after the recent trade deal between Japan and the US cleared a major hurdle for the BOJ to resume its rate-hike path.

Corporate earnings and commodity watch

In the corporate world, US tech megacaps Microsoft and Meta are due to report their earnings on Wednesday. These results will be crucial in setting the tone for the rest of the week and the broader earnings season.

“It’s been a solid US reporting season so far, but these megacap names need to run it hot and blow the lights out, given the bar to please has been sufficiently raised,” commented Chris Weston, head of research at Pepperstone.

In commodity markets, oil prices rose as potential supply shortages came into focus after President Trump gave Moscow an abbreviated deadline to work towards ending the war in Ukraine. Brent crude futures rose 14 cents, or 0.19%, to $72.65 a barrel.

In currency news, the Singapore dollar strengthened by 0.2% after Singapore’s central bank kept its monetary policy settings unchanged on Wednesday.

This decision followed stronger-than-expected economic growth in the country for the second quarter. The euro also edged up from a one-month low, rising 0.2% to $1.1564, as markets continued to weigh the implications of the EU’s recent trade deal with the Trump administration.

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The HSBC share price plummeted in Hong Kong after the company reported weaker-than-expected results and announced a $3 billion share buyback. It was trading at $97.50 on Tuesday, a few points below the year-to-date high of $102p. It has crashed to the lowest point since July 21.

HSBC share buyback and earnings

The HSBC stock price plummeted after the company published weaker-than-expected financial results. In a report, the company said that the profit before tax came in at $6.3 billion in the second quarter, lower than the expected $6.99 billion. 

HSBC’s revenue came in at $16.5 billion in the second quarter, lower than the median estimate of $16.67 billion. This performance happened after the company recorded a $2.1 billion impairment charge linked to its Bank of Communications. 

HSBC’s profit before tax plunged by $5.7 billion in the year’s first half. It blamed this crash to its BoCom impairment and the adverse impact of the $3.6 billion net gain related to its exit of the Canadian operations.  HSBC also blamed the ongoing trade war, with the CEO noting:

“While we would expect the direct impact from tariffs to have a relatively modest impact on our revenue, the broader macroeconomic deterioration may see RoTE excluding notable items fall outside of our mid-teens targeted range in future years.”

More data released today, July 30, were weaker-than-expected. For example, the return on tangible equity (RoTE) was 14.7%, much lower than the previous 21.4%. 

One of the few positive aspects of the report was that HSBC will continue to reduce its outstanding shares by implementing a $3 billion share buyback. Data shows that the outstanding shares have been falling in the past few years, moving from over 20 billion in Hong Kong to 17.71 billion today. 

However, the $3 billion buyback was in line with expectations, as we wrote here. This is one of the top reasons why the stock pulled back after its buyback announcement. 

The other notable news was that the company’s wealth management business continued doing well. Its fee and other income jumped by 22%, helped by its insurance, investment distribution, and private banking businesses. This business will continue to offset the others as interest rates fall.

HSBC share price analysis

The daily chart shows that the HSBC stock price retreated from the year-to-date high of $102.3 to $97.50 today. It has tumbled to the lowest level since July 21. 

This decline happened after the stock formed a rising wedge pattern, which comprises of two ascending and converging trendlines. This is one of the most bearish patterns in technical analysis.

The Relative Strength Index (RSI) was also in the overbought level, while the two lines of the MACD have formed a bearish crossover pattern. 

Therefore, the HSBC share price will likely continue falling to the 50-day moving average at $95 and then resume the uptrend. 

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Indian equity benchmarks, the Sensex and Nifty, are poised for a subdued start to Wednesday’s trading session, as a confluence of global and domestic factors fosters a sense of rising caution among investors.

The market is contending with the impending US Federal Reserve policy decision, the continued delay in a much-anticipated India-US trade deal, a muted start to the corporate earnings season, and persistent selling pressure from foreign institutional investors (FIIs).

The primary driver of the cautious mood is the high-stakes policy announcement from the US Federal Reserve, expected later today.

This, combined with the continued uncertainty in the global trade landscape, has left investors hesitant to take on risky bets.

Asian stock markets began Wednesday’s session with a modest and cautious advance, with the MSCI’s broadest index of Asia-Pacific shares outside Japan up a slight 0.3%.

While some markets like South Korea’s KOSPI rose 0.85 percent, others like Japan’s Nikkei were up a marginal 0.03 percent, and Hong Kong’s Hang Seng was down 0.20 percent.

This mixed regional picture offers little in the way of a strong directional cue for Indian markets.

The market mood was also shaped by the conclusion of recent trade talks between the US and China, which ended without any substantive agreement, adding another layer of uncertainty.

This comes as investors are preparing for a packed few days of market-moving events, culminating in US President Donald Trump’s fast-approaching August 1 tariff deadline.

Muted start expected on Dalal Street

Against this backdrop, Indian equities are expected to start the day on a negative note. Nifty futures on the NSE International Exchange were trading 39.30 points, or 0.16 percent, down at 24,799.50, hinting at a weak opening for the domestic market.

This expected dip follows a session on Wall Street where US stocks closed lower on Tuesday after some disappointing corporate earnings.

The Dow Jones Industrial Average fell 204.57 points, or 0.46 percent, the S&P 500 lost 0.30 percent, and the Nasdaq Composite shed 0.38 percent.

Adding to the pressure on Dalal Street is the consistent selling by Foreign Institutional Investors (FIIs), which has been a significant factor in denting market sentiment in recent sessions.

The delay in finalizing the India-U.S. trade deal and a so-far muted start to the quarterly earnings season by India Inc. are also weighing on investor confidence.

In currency and commodity markets, the US dollar index was hovering near a one-month high at 98.815, on track for its first month of gains this year.

In commodities, oil prices rose as potential supply shortages came into focus after President Trump gave Moscow an abbreviated deadline to work towards ending the war in Ukraine, with Brent crude futures rising 0.19 percent to $72.65 a barrel.

Spot gold also rose 0.4 percent to $3,327.69 per ounce.

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