The S&P 500 Index rose to a record high above 6,500. Inflationary pressures ease in Japan

On Thursday, US stock indices continued to rise. The Dow Jones (US30) climbed by 0.16%, the S&P 500 (US500) gained 0.32% to reach a new record high above 6,500, and the tech-heavy Nasdaq (US100) finished up 0.53%. Market sentiment was supported by strong economic data and sustained enthusiasm for artificial intelligence, despite mixed signals from Nvidia’s latest earnings report. The chipmaker reported a 56% surge in quarterly revenue but excluded potential China sales from its expectations, causing its stock to dip slightly even as analysts raised price targets and affirmed confidence in AI-driven growth. Other tech firms, including Broadcom, Micron, Microsoft, Meta, and Amazon, saw gains, highlighting the sector’s momentum. In the broader economy, US Q2 GDP was revised upward to 3.3% on an annualized basis, and jobless claims came in lower than expected, which eased recession concerns.

European stocks closed mixed on Thursday as markets digested key US tech sector earnings and the global rate outlook. The German DAX (DE40) fell by 0.03%, while the French CAC 40 (FR40) rose by 0.24% and the Spanish IBEX35 (ES35) gained 0.34%. The UK FTSE 100 (UK100) closed down 0.42%. The minutes from the ECB’s July meeting revealed a split among policymakers regarding the inflation outlook. Some argued that near-term risks were tilted to the downside, citing a weaker growth outlook and the impact of US tariffs. Others warned that risks could still be to the upside, particularly in the long term, given uncertainty about energy prices and currency movements. While inflation is at the target, officials noted it’s partly driven by temporary factors that could shift, underscoring the ongoing debate over whether the ECB should be cautious or vigilant in its policy.

WTI crude oil prices rose by 0.7% and reached $64.6 per barrel on Thursday, reversing earlier losses. The fading prospect of a peace deal between Russia and Ukraine lowered expectations for additional Russian supplies to enter global markets. Hopes for an easing of export restrictions on Moscow’s crude were further diminished as traders awaited a potential signal for tighter sanctions from President Trump. At the same time, Ukraine intensified its drone strikes on Russian oil infrastructure, disrupting exports and adding to the uncertainty.

Asian markets were mostly up on Thursday. Japan’s Nikkei 225 (JP225) rose by 0.73%, while China’s FTSE China A50 (CHA50) gained 1.02%. Hong Kong’s Hang Seng (HK50) dropped 0.81%, and Australia’s ASX 200 (AU200) closed with a positive result of 0.22%.

Tokyo’s core consumer prices in August 2025 came in at 2.5% year-on-year, marking the third consecutive month of decline and meeting market expectations. Although inflation has slowed, it remains above the Bank of Japan’s 2% target, which supports speculation about another rate hike later this year. Governor Kazuo Ueda recently noted that further wage growth is expected amid a tightening labor market, reinforcing the view that conditions for additional tightening are gradually forming. At its July meeting, the Bank of Japan left interest rates unchanged but raised its inflation expectations and struck a more optimistic tone on the economy.

The Australian dollar climbed to $0.654 USD on Friday, marking its fourth straight session of gains and reaching a two-week high, while the US dollar remained under pressure. The AUD also found support from stronger-than-expected domestic inflation, which eased market bets on a near-term rate cut by the Reserve Bank of Australia (RBA). Still, the Central Bank’s August meeting minutes indicated that further cash rate cuts are likely within the next year, with the pace and timing dependent on upcoming data and global risks. Investors are now looking ahead to the upcoming manufacturing PMI to get new insights into the country’s economic momentum.

In New Zealand, two-year-ahead consumer inflation expectations eased from 5.1% to 4.8%, while house price expectations held at 3.5%. Despite this, declining real interest rates and a dovish RBNZ stance are providing some support, although consumer sentiment and retail spending may remain subdued in the near term.