What moved
US cash markets ended Wednesday firmly higher: the S&P 500 closed up 0.46% at 7,666.6, the Nasdaq Composite 0.45% at 26,217.8 and the Dow 0.56% at 53,062. That strength has not carried: S&P 500 futures are flat and Nasdaq 100 futures are down 0.03%, the only live read on the American day, after Broadcom's results landed post-close.
Asia has been directionless. The Nikkei 225 is trading 0.17% lower at 64,214 with the yen sharply stronger, the Hang Seng is off 0.29% and the Shanghai Composite is up 0.15%; the Kospi has recovered a mid-session slump to sit 0.26% higher. Europe finished Wednesday lower across the board — the FTSE 100 down 0.3% at 10,756, the DAX 0.5% and the CAC 40 0.26%.
Why
The overnight story is Broadcom. The company reported record third-quarter revenue up 86% year on year to $29.6bn, with AI semiconductor revenue of $16.7bn more than tripling, and guided fourth-quarter AI revenue to $21.7bn — yet the group revenue guide of roughly $34.8bn sat just below the $35.05bn consensus, and the shares fell around 4% in after-hours dealing. For a stock this leveraged to the AI build-out, a beat that is merely large is not enough, and flat US futures say the read-across is being applied to the whole complex.
That fits Wednesday's pattern. Dell rose 15.8% on a record order book and raised guidance, but MongoDB fell 13.5% and Credo 20.0% despite both beating, punished for guidance and margins rather than for the quarter delivered. The index gains came from elsewhere — materials, financials and healthcare — while technology was the only sector to fall outright.
The macro backdrop is unusual: this is a Fed the market thinks may hike. Wednesday's soft ADP print trimmed September odds and pulled the dollar and yields back from their highs, which is why gold is up 2.39% at $4,470.8. Separately, Bank of Japan officials have kept a September move firmly on the table, and the yen has strengthened 1.96% to 157.05 per dollar.
Sentiment & risk appetite
Equity risk appetite reads better than the tape suggests. The VIX fell 6.98% to 15.2 on Wednesday, and our US breadth was genuinely broad — 3,634 advancers against 2,142 decliners, a mean move of +0.8% — with the Russell 2000 up 1.13%, ahead of every large-cap index. Dispersion was wide but rotational rather than defensive: PrimerIQ's US sector medians run from +1.63% in basic materials to -0.08% in real estate, with technology at just +0.24%.
The caution sits in rates and outside America. MOVE, which measures Treasury volatility, rose to 79.7 and is up 14.1% over five sessions even as the 10-year yield finished unchanged at 4.80%. Our UK breadth was 237 up against 522 down, and Asia's 3,489 against 8,868 — this rally has been narrow geographically.
Economic calendar
Wednesday's ADP report showed US private employment rising just 38,000 in August against a consensus nearer 47,000, the weakest monthly total since January, and it cut market-implied odds of a September Fed hike to roughly 60-64% from about 68% the day before. That is prior news, but it frames everything on today's slate.
The UK diary carries no first-tier data this morning, so the tests are American. Initial jobless claims and the July trade balance are due at 13:30 BST, with claims seen at 205,000 against 203,000 previously and the deficit expected to widen to about $86.4bn. The ISM services index follows at 15:00 BST, consensus 54.2 versus 54.1. Fed governor Christopher Waller speaks around 14:45 BST. The August employment report on Friday remains the week's real event.
Earnings
Broadcom's third quarter, out after Wednesday's close, was the one that mattered — record revenue and a tripling of AI chip sales, met with a roughly 4% after-hours fall on a fourth-quarter revenue guide a shade under consensus. The rest of the software and infrastructure cohort told the same story: Dell surged 15.8% on a record backlog, while MongoDB (-13.5%), Credo (-20.0%) and Palo Alto Networks (-9.3%) all fell hard on outlooks rather than on delivered numbers. Nothing of consequence has reported in London this morning.