(Bloomberg) — European and US equity futures were steady, while the dollar rose against its major peers amid speculation the Federal Reserve may take a more hawkish tone when announcing its policy decision on Wednesday.

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Contracts for the Euro Stoxx 50 were little changed, while S&P 500 futures were slightly down after the underlying gauge topped 5,100 overnight. The Bloomberg Dollar Spot Index rose 0.3% after falling 0.4% on Monday. Fed Chair Jerome Powell is expected to make a hawkish pivot at the April 30-May 1 meeting, according to Bloomberg Economics

Equity gauges climbed in Japan and Hong Kong, and Chinese onshore stocks fluctuated following data showing an expansion in the nation’s factory activity for a second month.

“China’s PMI surveys revealed mixed momentum in the economy’s supply and demand sides,” said Kyle Rodda, a strategist at Capital.com in Melbourne. “Manufacturing PMI was firm, but non-manufacturing PMI missed expectations, and it remains clear that the economy’s recovery, while still underway, is lukewarm overall.”

Japanese equities rose after a holiday, as the yen surged back from its weakest level against the dollar in 34 years amid suspicion the government intervened to support the currency.

The yen swung wildly, rallying more than 2% Monday after earlier dropping as much as 1.2% to 160.17 per dollar. It pared some gains during Asian trading hours as a Bloomberg gauge of the dollar strengthened slightly.

“While investors remain cautious about the extent of currency intervention, there seems to be a sense of relief as the uncertainty around yen depreciation has receded,” said Rina Oshimo, a senior strategist at Okasan Securities Co.

Elsewhere in Asia, some traders are also looking at the possibility China will need to take an extreme measure to support its moribund economy — devalue the yuan in a big-bang move. Markets in the Asian powerhouse will close on Wednesday until next week for the Labor Day holidays.

In the corporate world, Samsung Electronics Co.’s earnings surged after the semiconductor business turned profitable for the first time since 2022, reflecting the global AI development boom. Japanese trading house Sumitomo Corp. shares jumped by the most since August 2020 after activist investor Elliott Management Corp. was said to have built a “large” stake in the Japanese trading house.

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HSBC Holdings Plc reported a drop in first-quarter pretax profit and said its Group Chief Executive Officer Noel Quinn would retire from the company. The lender has begun a search for a successor.

Beating Expectations

Early results from the US reporting season suggest that more than 80% of companies are beating expectations. First-quarter earnings are now on track to increase by 4.7% from a year ago, compared with the pre-season estimate of 3.8%, according to data compiled by Bloomberg Intelligence.

US 10-year yields steadied Tuesday after falling five basis points in the previous session. The Treasury ramped up its estimate for federal borrowing for the current quarter to $243 billion, more than most dealers had anticipated. Australia and New Zealand bond yields declined early Tuesday.

US markets could remain volatile this week, but UBS continues to see the current environment as supportive for US equities — driven by solid earnings growth, a potential Fed pivot later this year, and accelerating artificial-intelligence investment.

“We remain constructive on US equities, and expect AI-related companies to drive strong earnings growth in the years ahead,” said Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management. “It is key for investors to hold a healthy strategic allocation to tech stocks, but also advocate diversified exposure across regions and sectors.”

In commodities, oil held its biggest drop in almost two weeks as discussions on a possible cease-fire in the Middle East reduced the risk premium for crude. Gold is set to gain for a third straight month ahead of this week’s Fed meeting.

Key events this week:

• Eurozone CPI, GDP, Tuesday

• US employment cost index, Conf. Board consumer confidence, Tuesday

• Amazon, Samsung, HSBC earnings, Tuesday

• Labour Day holiday across much of Europe, Wednesday

• Treasury’s quarterly refunding announcement, Wednesday

• US ADP employment change, JOLTS job openings, ISM Manufacturing, Wednesday

• Federal Reserve rate decision, Wednesday

• Eurozone S&P Global Manufacturing PMI, Thursday

• US factory orders, initial jobless claims, trade, Thursday

• Apple earnings, Thursday

• Eurozone unemployment, Friday

• US unemployment, nonfarm payrolls, ISM Services, Friday

• Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.2% as of 6:50 a.m. London time

• Japan’s Topix rose 1.7%

• Australia’s S&P/ASX 200 rose 0.2%

• Hong Kong’s Hang Seng fell 0.1%

• The Shanghai Composite was little changed

• Euro Stoxx 50 futures fell 0.1%

• Nasdaq 100 futures fell 0.1%

• Australia’s S&P/ASX 200 rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%

• The euro fell 0.2% to $1.0698

• The Japanese yen fell 0.3% to 156.77 per dollar

• The offshore yuan fell 0.1% to 7.2541 per dollar

• The Australian dollar fell 0.7% to $0.6523

• The British pound fell 0.2% to $1.2532

Cryptocurrencies

• Bitcoin rose 0.5% to $63,234.13

• Ether fell 0.4% to $3,163.5

Bonds

• The yield on 10-year Treasuries was little changed at 4.61%

• Japan’s 10-year yield declined 5.5 basis points to 0.870%

• Australia’s 10-year yield declined seven basis points to 4.42%

Commodities

• West Texas Intermediate crude fell 0.4% to $82.32 a barrel

• Spot gold fell 0.5% to $2,322.83 an ounce

This story was produced with the assistance of Bloomberg Automation.

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