{"id":65652,"date":"2026-07-30T03:08:14","date_gmt":"2026-07-30T07:08:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-rolls-royce-profit-surge-and-chinas-stimulus-pledges\/65652\/"},"modified":"2026-07-30T03:08:14","modified_gmt":"2026-07-30T07:08:14","slug":"global-markets-react-to-rolls-royce-profit-surge-and-chinas-stimulus-pledges","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-rolls-royce-profit-surge-and-chinas-stimulus-pledges\/65652\/","title":{"rendered":"Global Markets React to Rolls-Royce Profit Surge and China\u2019s Stimulus Pledges"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Rolls-Royce (<a href=\"\/stock\/RR\">RR<\/a>)<\/strong> significantly raised its <strong>2026 underlying operating profit target<\/strong> to a range of <strong>\u00a34.7bn to \u00a34.9bn<\/strong>, up from the previous <strong>\u00a34.0bn to \u00a34.2bn<\/strong>, following a massive <strong>46% jump<\/strong> in first-half profits.<\/li>\n<li><strong>China\u2019s Politburo<\/strong> vowed to accelerate <strong>fiscal spending<\/strong> and modernize its industrial sector to counteract a slowing economy, while maintaining a <strong>moderately loose monetary policy<\/strong>.<\/li>\n<li>The <strong>French economy<\/strong> showed resilience with <strong>0.2% GDP growth<\/strong> in Q2, though the government admitted its <strong>5% deficit target<\/strong> remains &quot;challenging&quot; amid stagnant private sector payrolls.<\/li>\n<li><strong>US-Iran negotiations<\/strong> mediated by Pakistan and Qatar are ongoing, with a focus on de-escalating tensions in the <strong>Strait of Hormuz<\/strong> to secure global shipping routes.<\/li>\n<\/ul>\n<h2>Rolls-Royce Hikes Guidance on Transformation Success<\/h2>\n<p>British engineering giant <strong>Rolls-Royce (<a href=\"\/stock\/RR\">RR<\/a>)<\/strong> has stunned markets by raising its mid-term financial targets following a robust first-half performance. The company reported an underlying operating profit of <strong>\u00a32.5bn<\/strong> for the first six months of 2026, driven by a <strong>22.5% operating margin<\/strong> and strong demand in its <strong>Civil Aerospace<\/strong> and <strong>Defence<\/strong> divisions.<\/p>\n<p>CEO <strong>Tufan Erginbilgi\u00e7<\/strong> attributed the success to a &quot;sweeping overhaul&quot; that has transformed the group into a more agile and profitable entity. In addition to the profit hike, the company increased its <strong>2026 free cash flow guidance<\/strong> to between <strong>\u00a33.8bn and \u00a34.0bn<\/strong> and confirmed it has completed <strong>\u00a31.4bn<\/strong> of its planned <strong>\u00a32.5bn share buyback<\/strong> for the year.<\/p>\n<h2>China Signals Proactive Fiscal Stance to Boost Growth<\/h2>\n<p>In Beijing, the <strong>Politburo<\/strong> concluded its July economic meeting with a commitment to &quot;actively attract foreign investment&quot; and speed up the modernization of industrial chains. The leadership reiterated a <strong>proactive fiscal stance<\/strong>, urging local governments to expedite spending on infrastructure and high-tech sectors to meet the annual growth target of approximately <strong>5%<\/strong>.<\/p>\n<p>The meeting comes as China grapples with a widening divergence between its <strong>booming high-tech manufacturing<\/strong> sector and <strong>sluggish domestic consumption<\/strong>. Policymakers emphasized the need for a <strong>moderately loose monetary policy<\/strong> to support the &quot;new three&quot; growth drivers\u2014electric vehicles, lithium batteries, and solar products\u2014while stabilizing the broader macroeconomy.<\/p>\n<h2>French Economy Rebounds Despite Fiscal Headwinds<\/h2>\n<p>France reported a <strong>0.2% expansion in Q2 GDP<\/strong>, a welcome recovery after a <strong>0.1% contraction<\/strong> in the first quarter. The growth was supported by a surprise <strong>0.4% month-on-month increase<\/strong> in <strong>consumer spending<\/strong> for June, which beat analyst estimates of a 0.1% decline.<\/p>\n<p>However, the labor market remains cool, with <strong>private sector payrolls<\/strong> falling by <strong>0.1%<\/strong> in the second quarter. Finance Minister <strong>Roland Lescure<\/strong> noted that while the economy is resilient enough to back a <strong>0.7% full-year growth forecast<\/strong>, the government&#39;s goal to reduce the <strong>public deficit to 5%<\/strong> is increasingly difficult to achieve without further spending cuts.<\/p>\n<h2>Diplomatic Efforts Intensify in the Middle East<\/h2>\n<p>Geopolitical tensions remain a critical variable for global markets. <strong>Pakistan\u2019s Foreign Office<\/strong> spokesperson <strong>Tahir Andrabi<\/strong> confirmed in a weekly briefing that negotiations between the <strong>United States<\/strong> and <strong>Iran<\/strong> are ongoing.<\/p>\n<p>The talks are specifically focused on the <strong>Strait of Hormuz<\/strong> and the <strong>Red Sea<\/strong>, where shipping disruptions have previously spiked energy costs. While the security situation remains &quot;precarious,&quot; mediators from <strong>Pakistan<\/strong> and <strong>Qatar<\/strong> are working to consolidate a fragile &quot;pause&quot; in hostilities to prevent a wider regional conflict.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Rolls-Royce (RR) significantly raised its 2026 underlying operating profit target to a range of \u00a34.7bn to \u00a34.9bn, up 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