UK inflation data matches BoE expectations with FTSE up 0.1%
Data shows U.S. small cap stocks surged with Russell 2000 up 3.5%. Asia tech stocks down 1% on Trump Taiwan comments. Europe mixed.
U.S. Market Data
The U.S. small cap stocks have seen a dramatic surge, with the Russell 2000 index (.RUT) soaring 3.5% on Tuesday. This marks its fifth consecutive day of gains over 1%, the longest streak since April 2000, and the highest level since January 2022. Over the past week, the Russell 2000 has jumped more than 10%, now up almost 12% for the year, closing the gap with the S&P 500’s 19% rise and the Nasdaq 100’s 21% increase in 2024.
U.S. disinflation trends continue, with futures fully pricing a Federal Reserve rate cut in September and 65 basis points of rate cuts by year-end. June retail sales exceeded expectations, and the Atlanta Fed’s ‘GDPNow’ growth estimate data increased to 2.5% from 2%. Volatility is creeping back, as indicated by the VIX reaching its highest level in over a month. S&P 500 futures were down 1% and Nasdaq futures off 1.3% ahead of Wednesday’s opening.
Asian Markets Data
In Asia, technology stocks suffered following comments by Donald Trump regarding Taiwan, which resulted in a 1% drop in Taiwan’s benchmark index (.TWII) and a 3% fall for Taiwan Semiconductor Manufacturing Corp. (TSMC). Tokyo’s Nikkei 225 declined by 0.4% to 41,097.69. Meanwhile, South Korea’s Kospi fell 0.8% to 2,843.29, and the Shanghai Composite dropped 0.5% to 2,962.85. However, Australia’s S&P/ASX 200 advanced by 0.7% to 8,057.90.
Open a Forex Live Trading account among the multiple available ones we have on our site. Every single one is tailor-made for a specific trading style
Europe
European markets also faced declines, with Germany’s DAX losing 0.3% to 18,615.00 and France’s CAC 40 dipping 0.1% to 7,568.69. The FTSE 100 in London edged up 0.1% to 8,169.24 after UK inflation data matched the Bank of England’s 2% target for June. Sterling rose above $1.30, reducing expectations of a Bank of England rate cut next month.
Technology Sector and Data on Trade Tensions
Technology shares globally were under pressure due to reports that the U.S. plans to tighten import controls on companies sharing chip-making technology with China. This data caused significant declines in tech stocks, with Nvidia falling 3.3% and Dutch chip equipment maker ASML Holding NV plunging 7.4% in pre-market trading. In Tokyo, shares of Tokyo Electron and Disco Corp. dropped 7.5% and 4.5%, respectively.
Commodities and Currency Markets
In commodity trading, U.S. benchmark crude oil rose by 36 cents to $81.12 per barrel, while Brent crude increased by 23 cents to $83.96 per barrel.
Currency
The U.S. dollar weakened to 156.34 Japanese yen from 158.34 yen, influenced by speculation of Japanese market intervention. The euro rose to $1.0934 from $1.0897, and the British pound climbed to $1.3040 following stronger-than-expected inflation data.
Economic and Corporate Updates
The U.S. earnings season is expanding beyond major banks, with companies like Johnson & Johnson, United Airlines, and Elevance Health set to report. In Europe, Adidas AG gained 5% after raising its profit forecast, and Roche Holding AG saw a boost due to positive early-stage study results and data for a weight-loss pill.
Key Economic Events
Key events this week include Eurozone CPI, U.S. housing starts and industrial production data, and the Fed’s Beige Book. Central bank meetings, including the European Central Bank’s rate decision and speeches from multiple Federal Reserve officials, will also be closely watched.
Our economic blog is a place where you can get regular updates on news and helpful Forex tips
