Asian Pacific stock indices mixed

European stock indices were firmer across the board in early trade this morning. Investor sentiment was underpinned by cautious optimism around ongoing trade negotiations. This mildly positive tone reflects hopes that several countries will finalise deals before President Trump’s July 9 tariff deadline. 

Despite the uncertainty, markets appear to be pricing in the possibility of some last-minute diplomacy. Meanwhile, dovish commentary from the Bank of England helped support risk sentiment in the UK.

Source: TN Trader

Ten-year gilt yields fell to a nine-week low, reinforcing market expectations for a patient stance on future rate hikes.

US stock indices ended mixed on Tuesday, with clear evidence of portfolio rebalancing as the second half of 2025 began. Investors cashed in on winning tech/growth stocks and used the proceeds to increase their exposure to ‘value’ stocks and other overlooked (and undervalued) corners of the market. 

This led to gains of 0.9% and 1.0% for the Dow and the mid-cap, domestically focused Russell 2000, respectively. Within the Dow, demand was notably high for health care and materials names like Amgen, Johnson & Johnson, and UnitedHealth. Meanwhile, the tech-heavy indices, the S&P 500 and NASDAQ, dropped 0.1% and 0.8%, respectively.

The rotation followed weakness in the information technology and communications services sectors, both of which fell by over 1%. Key names like Nvidia, Palantir and AMD all came under selling pressure. Tesla dropped over 5%, falling back toward the $300 level ahead of its Q2 deliveries report due today. 

Despite this, the US 500 triggered its first “golden cross” in over two years. This is a technical signal which is typically viewed as bullish and occurs when the 50-day moving average crosses above the 200-day moving average, as seen below:

Source: TN Trader

Historically, such a pattern has been associated with longer-term market resilience. The last time such an indicator appeared was back in February 2023. The index has rallied more than 48% since.

Oil markets were little changed in early trade on Wednesday, albeit with an upside bias.  Traders attempted to balance expectations for increased production against recent mixed economic signals. OPEC+ is expected to announce yet another output increase of 411,000 barrels per day when it meets this weekend. 

Meanwhile, the latest data on US inventories from the American Petroleum Institute (API) noted an unexpected build in crude inventories last week, even as the US driving season proceeds, when typically, a drawdown is expected.

Crude has spent the past week moving sideways and consolidating in a tight price range. Front-month WTI has spent most of this period stuck between $65.50 and $64.00. This follows a period of heightened volatility after Israel launched airstrikes against Iran in mid-June, later to be joined by the US. 

Source: TN Trader

Market participants are now looking for fresh information that could influence the direction of the near-term price. For now, oil prices remain stable, though market tone suggests that positioning could shift quickly depending on how the trade and geopolitical headlines unfold in the coming sessions.

In currency markets, the US dollar remains on the defensive. Since the beginning of this year, the dollar has come under relentless selling pressure as investors considered President Trump’s plans for his second term. That selling exacerbated as Mr Trump triggered a trade war and as investors priced in their concerns over the ever-rising US national debt (which the President’s ‘Big, Beautiful Bill’, which is expected to pass through the House today, will only add to). 

The Dollar Index continued to hover near multi-year lows, having dipped below 96.00 yesterday. This comes amid speculation over next year’s leadership change at the Fed Reserve. President Trump has repeatedly criticised Fed Chair Jerome Powell for not cutting rates. 

Mr Trump has hinted that he may name Mr Powell’s successor later this year, rather than delaying the announcement to closer to Mr Powell’s end of tenure next May.

The EUR/USD has pulled back slightly from its own multi-year highs but still holds comfortably above 1.1700. Sterling has also pulled back from its best levels against the US dollar, dropping below 1.3700 on profit-taking.

Both currencies are benefiting from the dollar’s ongoing weakness and a broader rebalancing of positioning as traders weigh rate outlooks across regions.

Source: TN Trader

President Trump’s flagship tax-and-spending bill passed a key Senate vote on Tuesday, advancing legislation aimed at boosting domestic semiconductor manufacturing. The bill raises tax credits for chip producers from 25% to 35%, with firms like Intel, TSMC, and Micron expected to benefit - provided they meet the new expansion criteria by 2026.

This new round of incentives builds on the CHIPS and Science Act, which had already provided billions in grants and loans to support the sector. However, before these latest provisions become law, the bill must again clear the House, where earlier versions had met resistance. Trump is urging lawmakers to push it through by July 4.

Markets are once again facing a crossroads. A positive technical breakout in the S&P 500 via the golden cross points to strength beneath the surface. But tech headwinds and trade uncertainty continue to stir rotation. Tesla’s delivery numbers today could reignite sentiment - or dampen it further.

There’s also the US ADP employment report due out today. This comes ahead of tomorrow’s official Non-Farm Payroll report, followed by Friday’s US Independence Day holiday.