U.S. Stocks near record highs as growth sectors shine
Markets across the globe experienced a mix of gains and cautious moves this week, driven by a blend of positive equity performance in the U.S., fluctuating European sentiment, and anticipation surrounding inflation data and geopolitical shifts.
U.S. equities showed strong performance, driven by investor confidence in growth and cyclical sectors. Below are the key highlights from Thursday’s market action.
Broad gains lift markets
- Nasdaq Composite rose by 1%, finishing at 20,167.9
- S&P 500 climbed 0.8% to close at 6,141, showing strength across most sectors
- Real estate and consumer staples were the only segments to post losses
Political and trade sentiment support risk appetite
Investors reacted positively to signs that the U.S. may extend the suspension of certain tariffs set to expire in early July. Additionally, speculation around a possible early announcement of a new Federal Reserve Chair introduced political interest into the market narrative.
Economic data sends mixed signals
While markets rallied, underlying economic data painted a less definitive picture of the U.S. economy.
Key economic developments
- U.S. Q1 GDP was revised lower to a 0.5% annualised contraction, due to weaker consumer spending and export figures
- Jobless claims dropped unexpectedly to 236,000, a six-week low
- Continuing claims, however, rose to their highest since November 2021
- Durable goods orders outperformed, thanks to increasing demand for commercial aircraft
- Pending home sales rose across all regions
Treasury market signals Fed pause
- 10-year Treasury yield fell to 4.25%
- 2-year Treasury yield dropped to 3.73%
These movements indicate market expectations for a possible pause in Federal Reserve rate hikes.
Asia rallies as Japan leads gains
Asian markets kicked off Friday on a high note, with Japan’s Nikkei surging to a five-month high.
Regional highlights
- Boost from tech giants such as Tokyo Electron, Sony, and SoftBank
- Softer inflation data in Japan reduced expectations of further Bank of Japan rate hikes
- China traded flat, while South Korea’s KOSPI slipped modestly
Markets remained cautious ahead of the July 9 U.S. tariff deadline amid ongoing trade tensions.
Europe struggles for direction amid mixed earnings
European equities delivered mixed results, with investors responding to geopolitical commitments and sector-specific movements.
Key takeaways
- STOXX 50 edged down 0.2%; STOXX 600 managed a modest 0.1% gain
- Defence stocks like BAE Systems, Rheinmetall, and Airbus rallied on NATO’s spending commitment
- Technology shares lagged, especially after ASML dropped 2.5% post-downgrade
- German consumer confidence slipped again, hinting at persistent regional headwinds
Currency and commodity moves: Dollar weakens, oil stabilises
The U.S. dollar retreated further as markets priced in possible rate cuts and reacted to dovish commentary from the Fed Chair.
Forex and commodity insights
- Dollar Index dropped toward 97, its lowest since February 2022
- EUR/USD climbed to 1.1705, reflecting improving euro sentiment
- Oil prices edged higher in Asia, supported by a U.S. crude drawdown and China stimulus optimism
- Brent and WTI remain down over 12% for the week, as Middle East tensions ease following a U.S.-brokered Israel-Iran ceasefire
Company highlights: Corporate moves making headlines
CEO Masayoshi Son unveiled ambitions to make SoftBank a top AI superintelligence platform in a decade. The group has invested $32 billion in OpenAI since 2024 and recently acquired Ampere for $6.5 billion.
Revolut expands in Latin America
Revolut will acquire Argentine lender Cetelem from BNP Paribas, introducing multi-currency accounts and fee-free transfers to a market where many residents use the U.S. dollar as a haven.
AI and robotics shape tech M&A
- Meta Platforms is in advanced talks to acquire PlayAI, a voice AI startup, Bloomberg reported
- Tesla continues restructuring; key executive Omead Afshar exits amid demand slowdown in North America and Europe
Strategic updates from big names
- Novo Nordisk partners with WeightWatchers to sell Wegovy for $299/month, following the end of its deal with Hims
- Siemens Energy will produce industrial transformers in the U.S. by 2027, expanding its Charlotte factory if demand and tariffs remain high
- Pony AI shares jumped 15% as Uber and Travis Kalanick explore acquisition plans for its U.S. arm
Analyst actions: Key upgrades and downgrades
- UBS raised Meta’s target to $812 based on AI-driven revenue potential
- Benchmark lifted Tesla to $475 on the robotaxi rollout and supportive Texas AV regulations
- Jefferies downgraded ASML and ASM amid weakening chip equipment demand
- JP Morgan initiated Centrus Energy at Neutral due to uncertain government funding
- Wells Fargo downgraded The Trade Desk over rising CTV competition from Amazon, Roku, and Disney
Upcoming data and market movers
Keep an eye on:
- U.S. Core PCE Price Index – the Fed’s key inflation gauge
- University of Michigan consumer sentiment report
- Oracle earnings – a potential driver of tech sector sentiment
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