McDonald’s said its sales last quarter sputtered as the burger giant grappled with consumers reining in their spending, sounding a warning for the restaurant sector. Chief Executive Chris Kempczinski said lower-income consumers began reducing their visits last year, but the slowdown has deepened and broadened across the U.S. and other major markets. Consumers have been buying fewer items per visit or selecting cheaper ones, he said. Many people are opting to dine at home because grocery prices have become less expensive than dining at restaurants. The fast-food giant said U.S. same-store sales in the June quarter were down nearly 1%, the first such decline since 2020. Analysts had expected the metric reflecting sales at stores open at least 13 months to be flat. The company also reported declines globally, with conflict in the Middle East and a weaker performance in France. The weak trends are continuing in the current quarter, according to the company. Nevertheless, the fast-food group reaffirmed its outlook. The share price rose as a result and even led the Dow Jones with a plus of 4.2 percent.

Despite holding in positive territory for much of the day's session, the Swiss market ended weak on Monday due to a mild bout of selling pressure in the final hour. The benchmark SMI ended with a loss of 26.59 points or 0.22% at 12,214.90. The index, which touched a high of 12,300.07 in the session, dropped to 12,197.09 inthe final hour. Holcim ended down 2.75%. Straumann Holding and Richemont closed lower by 1.37% and 1.11%, respectively. Lonza Group, Roche Holding, ABB, Partners Group, VAT Group, Logitech International, UBS Group and Lindt & Spruengli lost 0.7 to 1%. Sandoz Group climbed 3.68%. Kuehne + Nagel gained 1.08%, while Sika, Novartis and Givaudan ended higher by 0.6 to 0.65%. SGS and Swatch Group posted modest gains.

European stocks failed to hold early gains and closed broadly lower on Monday as investors digested a slew of corporate earnings updates, and looked ahead for more results, and some key economic data, and policy meetings of central banks, including the Federal Reserve and the Bank of England. Escalating tensions in the Middle East weighed on sentiment. The Middle East braced for a potential flare-up in violence after Israeli authorities said a rocket from Lebanon struck a soccer field in the Israeli-controlled Golan Heights, killing several children and teens in what the military called the deadliest attack on civilians since Oct. 7. The pan European Stoxx 600 ended down 0.2%. Germany's DAX and France's CAC 40 ended lower by 0.53% and 0.98%, respectively. The U.K.'s FTSE 10 edged up 0.08%, while Switzerland's SMI closed 0.22% down. Among other markets in Europe, Austria, Greece, Netherlands, Russia, Spain and Turkiye closed weak. Belgium, Denmark, Finland, Iceland, Norway, Poland and Portugal ended higher, while Sweden closed flat. In the UK market, JD Sports Fashion gained more than 4%. Airtel Africa and Natwest Group gained 2.9% and 2.63%, respectively. Segro climbed about 2.05%. Prudential, Astrazeneca, Barratt Developments, Relx, M&G, Persimmon, Severn Trent, Hikma Pharmaceuticals, British American Tobacco, Tesco, Frasers Group and United Utilities ended higher by 1 to 1.7%. Entain lost about 8.1%. Reckitt Benckiser tumbled 8.8% amid concerns about potential litigation after a U.S. jury found that infant formula by Abbott Laboratories had caused a girl to develop a dangerous bowel disease. EasyJet, Anglo American Plc, Burberry Group, Intertek Group, Whitbread, Beazley, Glencore, Associated British Foods, Antofagasta, Pershing Square Holdings, Fresnillo, Haleon and Kingfisher lost 1 to 2%. In the German market, Merck rallied more than 3% after raising forecast for the group. Infineon, Qiagen, RWE, Adidas and Siemens Healthineers gained 1 to 2.4%. Mercedes-Benz, BASF, Henkel, MTU Aero Engines, BMW, SAP, HeidelbergCement, Zalando, Siemens, Commerzbank and Beiersdorf lost 1 to 2%.

The S&P 500 inched higher to kick off a busy week packed with corporate-earnings reports, a Federal Reserve interest-rate decision and key economic data. Indexes were choppy throughout the trading session before ending mixed. After declining last week, the tech-heavy Nasdaq Composite gained 0.1%. The S&P 500 also rose 0.1%, while the Dow Jones Industrial Average dropped 0.1%. The big question for investors in coming days is whether a succession of potentially market-moving events could extend a recent rotation of stock-market winners and losers that has punished large tech stocks and boosted shares of smaller companies. “There’s just a lot going on,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “It’s hard to make a big call ahead of all of this.” One reason why investors have dumped shares of tech giants in recent weeks: Many have grown concerned that their huge rally in the first half of the year means they need to post unrealistically large profits to justify their share prices. Those declines have dragged the S&P 500 lower for the past two weeks, cutting the index’s gains for the year to 15%. The moves have also lowered the bar slightly for Microsoft, Meta Platforms, Amazon.com and Apple, which will report their earnings over three days starting Tuesday.

After rising at the start of the week, the East Asian stock markets fell again on Tuesday. Participants speak of caution ahead of the interest rate decisions by the Bank of Japan (BoJ) and the US Federal Reserve on Wednesday. The Chinese markets are waiting for important economic data in the course of the week, such as the purchasing managers' indices for the service sector and the manufacturing industry, both for July. Although the Chinese central bank recently cut interest rates in a surprise move, there is still scepticism as to whether this will be enough to stimulate the weakening Chinese economy. Instead, the market is assuming that further support will be needed.

The U.S. bond market was quiet, with the yield on the 10-year U.S. Treasury note ticking down to 4.176% from 4.199% on Friday. Market participants are waiting for the outcome of the Fed meeting in the middle of the week.

UBS lowers Air France-KLM target to EUR 12.05 (18) – Buy
UBS raises Generali target to EUR 40.50 (39.70) – Neutral
Bank of America lowers Infineon target to EUR 42 (47) – Buy

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