USA

During the last week, U.S. equity markets experienced moderate volatility as investors digested mixed economic signals. Inflation data for June showed a 0.3% monthly increase, keeping annual inflation at elevated levels and fueling concerns about the Federal Reserve's ability to cut rates in the near term. The release of the Fed’s June meeting minutes indicated that only a minority of officials favored early rate cuts, while the majority remained cautious, particularly amid escalating tariff risks. Labor market data remained robust, with initial jobless claims staying low and consumer credit expanding, indicating continued household resilience. However, the start of the Q2 earnings season introduced some uncertainty, as early reports signaled a slowdown in profit growth to around 5.8% year-on-year from Q1’s double digits. These factors pressured the S&P 500 and Nasdaq slightly lower, though both indices remained close to record highs.

Europe

European markets struggled through the week, weighed down by disappointing economic data and mounting concerns over global trade tensions. In the UK, GDP contracted for the second consecutive month, shrinking by 0.1% in May, while inflation remained sticky at around 3.4%—the highest in the G7. Across the Eurozone, inflation inched back up to 2%, aligning with the ECB’s target but reflecting renewed price pressures after recent lows. Corporate earnings expectations remained soft, with the STOXX Europe 600 forecasted to post a small year-on-year decline. Investor sentiment was further dampened by U.S. tariff threats targeting European exports, exacerbating fears of a slowdown in trade-sensitive sectors such as autos and luxury goods. As a result, key European indices like the DAX 40, FTSE 100, and STOXX 600 posted weekly losses.

Japan

Japanese equities closed the week lower, driven by concerns over weakening external demand and renewed trade friction. The Nikkei 225 fell by around 0.9% as investors reacted to the negative sentiment from potential new U.S. tariffs affecting Asian exports. While the domestic services sector remained in expansion territory, with the June PMI at 51.7, manufacturers remained under pressure. The Japanese yen depreciated to five-month lows against the dollar, reflecting capital flows favoring U.S. assets amid global uncertainty. Overall, markets remained cautious ahead of upcoming corporate earnings releases, with particular concerns over margin compression due to higher input costs and weaker external demand.

China

In China, markets exhibited a split reaction to slowing growth and rising hopes for policy stimulus. The Shanghai Composite advanced by over 1% during the week, supported by expectations that Beijing would introduce new supportive measures following weaker-than-expected Q2 GDP growth, which came in at approximately 5.1%. Export data remained mixed, with a solid headline rise of 5.8% in June exports overshadowed by a significant drop in shipments to the U.S., reflecting the impact of escalating tariffs. Domestic demand indicators, including retail sales and PMI readings, remained subdued, pointing to persistent structural weaknesses in consumption and investment. While A-shares gained on stimulus expectations, the Hang Seng Index in Hong Kong fell sharply, weighed down by geopolitical tensions and capital outflows from the region.