Stock indices traded mixed on Thursday. At the end of Thursday, the Dow Jones Index (US30) fell by 0.17%, while the S&P 500 index (US500) gained 0.23%. The NASDAQ Technology Index (US100) closed positive 0.34%. Stocks were supported by lower bond yields following an unexpected decline in the US Producer Price Index for May. In addition, weekly jobless claims unexpectedly rose to a near 10-month high, raising the likelihood of a Fed rate cut this year.

US weekly jobless claims unexpectedly rose by 13,000 to a 10-month high of 242,000, indicating a weak labor market versus expectations of a decline to 225,000. The May US PPI for final consumption goods and services unexpectedly declined to 2.2% y/y from 2.3% y/y in April, weaker than expectations for a 2.5% y/y increase.

Some positive corporate news on Thursday also played into stocks' hands. Broadcom closed higher by more than 12%. It led the rally in AI stocks after reporting higher-than-expected adjusted net revenue for the second quarter and full-year revenue guidance above consensus. Additionally, Tesla shares are up more than 3% after CEO Musk made proposals to revise his compensation package and move the company's registered office to Texas.

Equity markets in Europe mostly fell on Thursday. Germany's DAX (DE40) was down 1.96%, France's CAC 40 (FR40) closed down 1.99%, Spain's IBEX 35 (ES35) fell by 1.59%, and the UK's FTSE 100 (UK100) closed negative 0.63%.

ECB Governing Council spokesman Muller said yesterday that Eurozone inflation could accelerate again, and interest rates would presumably need to remain above average for some time to reach our target.

WTI crude oil prices fell towards $78 a barrel on Friday in a likely technical correction but are still trending higher by more than 3% for the week as a confident outlook for global demand outweighed market uncertainty over the timing and extent of a US rate cut. Earlier this week, the US EIA raised its estimate for global oil demand growth to 1.1 million bpd in 2024 from a previous estimate of 900,000 bpd.

Asian markets were equal yesterday. Japan's Nikkei 225 (JP225) was down 0.40% yesterday, China's FTSE China A50 (CHA50) fell by 0.31%, Hong Kong's Hang Seng (HK50) was up 0.97% and Australia's ASX 200 (AU200) was positive 0.44%.

The Bank of Japan (BoJ) unanimously kept its key short-term interest rate unchanged at 0% to 0.1% at its June meeting, as expected, after raising the rate for the first time since 2007 and ending an eight-year period of negative rates in March. At the same time, the board indicated that it may begin reducing its bond purchases after the July meeting. The move was supported by an 8–1 majority vote. Friday's statement said Japan's economy is recovering moderately despite volatility in some areas. As for inflation, the YoY reading was 2 to 2.5 %, with inflation expectations rising marginally. Meanwhile, core CPI is expected to rise gradually.

On Thursday, the HKMA (Hong Kong Monetary Authority) said high interest rates may persist for some time due to uncertainty over when the US Federal Reserve will lower borrowing costs. Monetary policy in the city is conducted in line with the US, as the local currency is pegged to the US dollar. Elsewhere, Beijing may take targeted retaliatory measures against the EU after the bloc began raising tariffs on Chinese electric cars, realizing that a tougher response could backfire.

S&P 500 (US500) 5,433.74 +12.71 (+0.23%)

Dow Jones (US30) 38,647.10 −65.11 (−0.17%)

DAX (DE40) 18,265.68 −365.18 (−1.96%)

FTSE 100 (UK100) 8,163.67 −51.81 (−0.63%)

USD Index 104.70 +0.52 (+0.52%)

Important events today:

• – Japan BoJ Interest Rate Decision at 06:00 (GMT+3);
• – Japan BoJ Monetary Policy Statement at 06:00 (GMT+3);
• – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 20:30 (GMT+3).

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