USA

During the last week, Markets in the U.S. closed at record highs, with the S&P 500 and Nasdaq reaching fresh peaks. This surge was driven by optimism around future Federal Reserve rate cuts, strong tech earnings, and improving consumer sentiment. The final Q1 GDP reading showed a surprising contraction of –0.5%, but forward-looking data—including a rebound in durable goods orders and falling initial jobless claims (down to ~245k)—signaled potential Q2 recovery. Consumer confidence improved significantly, and inflation expectations continued to ease, with core PCE staying subdued. Fed officials, including Michelle Bowman, hinted at easing by year-end, reinforcing dovish market expectations. Tech giants like Tesla and Nvidia led the rally, while broader industrials and housing sectors showed mixed performance due to weak housing starts and soft manufacturing PMI data.

Europe

European markets posted modest gains, buoyed by defense spending commitments made at the NATO summit in Brussels and signs of potential fiscal stimulus in Germany. However, the broader macro picture remained stagnant. Flash PMIs across the Eurozone were largely unchanged, hovering near the 50 mark, indicating flat economic activity. Inflation pressures persisted, particularly in services, keeping the European Central Bank cautious ahead of further policy decisions. Despite the geopolitical backdrop and sticky inflation, the STOXX Europe 600, FTSE 100, and DAX 40 inched higher, supported by strength in energy and defense-related equities. Investor sentiment remained cautious, with many awaiting clearer signals on inflation trajectories and ECB policy direction.

Japan



Japanese equities, led by the Nikkei 225 and TOPIX, gained modestly over the week, helped by improving regional sentiment following a ceasefire in the Middle East and stable domestic conditions. The composite PMI remained flat, reflecting a stagnant services and manufacturing environment, though consumer confidence held firm. The Bank of Japan maintained its current policy stance, emphasizing patience amid weak inflation and sluggish wage growth. Despite ongoing concerns over external demand and weak exports, Japanese equities benefited from the global risk-on environment and the yen’s relative weakness, which continued to support corporate profits in export-heavy sectors such as automotive and electronics.

China


In China, economic signals were mixed but slightly tilted toward optimism. The Caixin manufacturing PMI rebounded into expansion territory at 50.4 in June, its first positive reading in several months, reflecting a modest recovery in private-sector manufacturing. However, broader economic concerns persisted, including weak investment and ongoing deflationary pressures. Policymakers appeared hesitant to deliver broad-based stimulus, focusing instead on targeted credit easing and infrastructure support. Geopolitically, tensions with the U.S. cooled slightly following trade progress on rare-earth materials, although new friction emerged with Canada over digital taxes. Equity markets responded favorably—Shanghai Composite ended the week marginally higher, while the Hang Seng rose around 0.8% on regional optimism and hopes of renewed growth momentum.