Wall Street rallied on the last day of Q2, as easing inflation offered relief to investors worried about further interest rate hikes. The Dow closed more than 280 points higher, while the S&P and the Nasdaq added 1.2% and 1.4%, respectively. PCE inflation, the Fed's preferred inflation gauge, rose 0.3% mom, in line with forecasts and below 0.4% in April. Also, the annual core rate slowed to 4.6% and the headline PCE rate reached the lowest in nearly two years. On the corporate front, shares of Apple rose 2.3% and the company’s market cap climbed above$3 trillion. On the other hand, Nike fell 2.6% after a weaker-than-expected quarterly profit. So far on Q2, the Dow Jones added 2.5%, the S&P surged 7%, a third straight quarter of gains and the Nasdaq jumped 13.3%, pushing year-to-date gains to 3.8%, 16.4% and 32.8% respectively, led by a rally in AI-related shares and bets the Fed is done with most of its rate hikes.
European shares closed higher on the last trading session of June, with Germany's DAX 40 rising by 1.3% to 16,160 points and the pan-European STOXX 600 gaining approximately 1.2% to 462 points. The indexes have also recorded gains of 3.4% and 1% on a quarterly basis, respectively, marking their third consecutive quarter of growth. Sentiment was supported by data indicating that inflationary pressures in the Euro Area had cooled down in June. The latest CPI report revealed that headline inflation eased more than anticipated, reaching 5.5%, the lowest level since January 2022. However, the core rate remained persistently high, supporting the expectation that the ECB is likely to continue raising rates in the coming months. Elsewhere, PCE price inflation in the US also eased in May, while weak data on China's factory activity has sparked hopes for increased policy stimulus in the world's second-largest economy.
The S&P/ASX 200 Index rose 0.12% to close at 7,203 on Friday and finished the week 1.5% higher, underpinned by easing domestic inflation which reinforced expectations that the Reserve Bank of Australia could soon end its tightening campaign. Meanwhile, investors remain cautious about heightened economic uncertainties in China, Australia’s largest trading partner, as well as the prospect of further monetary tightening from other major central banks. Commodity-linked stocks led the charge, with gains from Woodside Energy (0.5%), Fortescue Metals (0.3%), Rio Tinto (0.2%), Pilbara Minerals (1.2%) and Newcrest Mining (0.3%). Other index heavyweights also advanced, including Commonwealth Bank (0.2%), Macquarie Group (0.8%), Wesfarmers (0.5%), James Hardie (1%) and Xero (1.4%).
The Shanghai Composite rose 0.62% to close at 3,202 while the Shenzhen Component gained 1.02% to 11,027 on Friday, erasing losses from the previous session even after data showed that China’s manufacturing activity contracted for the third straight month in June, while services sector growth slowed to a six-month low. Mainland stocks have also come under pressure this month from heightened economic uncertainties in China and the lack of aggressive pro-growth policy measures from Beijing, though investors remain hopeful that authorities would offer more stimulus this year. Notable gains were seen from heavyweight firms on Friday such as Eoptolink Technology (12.2%), Contemporary Amperex (2.8%), Foxconn Industrial (5.9%) and Huagong Tech (9%).
The BSE Sensex soared by 820 points to close at 64,733 on Friday, another fresh record, notching a 2.7% surge on the week as markets continued to bet on the Indian economy to escape the deteriorating external backdrop. Foreign investments have been a pillar for growth in Indian equity markets, with data from this week showing that foreign investors purchased more than net INR 850 billion this financial year, on track to swing from net divestments in the two prior years amid comparatively loose monetary conditions by the RBI and a strong growth outlook for the domestic economy. Tech shares led the gains in the session, with Infosys adding 3.4% and TCS jumping 2.9%. Auto manufacturers also closed sharply in the green, with Mahindra & Mahindra jumping 4.2% and Maruti Suzuki gaining 2.5%.
The S&P/ASX 200 Index rose 0.12% to close at 7,203 on Friday and finished the week 1.5% higher, underpinned by easing domestic inflation which reinforced expectations that the Reserve Bank of Australia could soon end its tightening campaign. Meanwhile, investors remain cautious about heightened economic uncertainties in China, Australia’s largest trading partner, as well as the prospect of further monetary tightening from other major central banks. Commodity-linked stocks led the charge, with gains from Woodside Energy (0.5%), Fortescue Metals (0.3%), Rio Tinto (0.2%), Pilbara Minerals (1.2%) and Newcrest Mining (0.3%). Other index heavyweights also advanced, including Commonwealth Bank (0.2%), Macquarie Group (0.8%), Wesfarmers (0.5%), James Hardie (1%) and Xero (1.4%).
