InvestMacro

On Wednesday, the US stock indices closed mixed as caution persisted in the technology sector. By the end of the day, the Dow Jones Index (US30) rose by 0.35%. The S&P 500 Index (US500) declined by 0.10%. The Technology Index NASDAQ (US100) closed lower by 0.43%. Investors attempted to assess whether real demand for AI infrastructure can justify the enormous capital expenditures of major IT giants. Traditional sectors of the economy, by contrast, received notable support. Easing inflation concerns due to the prospect of a rapid resumption of energy exports from the Middle East pushed US Treasury yields lower. As a result, the Dow Jones outperformed. The Index was also supported by expectations of a major reshuffling: on Monday, June 29, Alphabet (Google’s parent company) will officially replace Verizon in the Dow Jones Industrial Average, significantly increasing the weight of the technology and AI sectors in this historic benchmark.

The Canadian dollar (USD/CAD) posted a sharp decline, falling to a yearly low of 1.42 per US dollar. The main driver of the “loonie’s” weakness was the powerful global rally of the US dollar. Traders are aggressively pricing in a hawkish scenario in the United States after several FOMC members under Kevin Warsh signaled the need for more than one rate hike before the end of 2026. Unlike the Fed’s firm stance, the Bank of Canada (BoC) is taking a far more cautious and patient approach, depriving the national currency of monetary support.

At the end of June, the Mexican peso fell to 17.6 per US dollar, hitting its lowest level since early April. The main driver of the peso’s weakness was the sharp global strengthening of the US dollar against both developed and emerging‑market currencies. Meanwhile, domestic Mexican factors removed fundamental support for the peso. Fresh economic data showed that headline inflation in Mexico unexpectedly slowed to a ten‑month low of 3.55% in the first half of June, while core inflation also fell more than expected. This cooling of price growth, combined with a weakening national economy (GDP contracted by 0.6% in Q1), strengthened the case for further monetary easing by the Bank of Mexico, which has already cut its policy rate to 6.50%.

European indices traded without a unified direction yesterday. By the end of the day, Germany’s DAX (DE40) fell by 0.62%, France’s CAC 40 (FR40) rose by 0.54%, Spain’s IBEX 35 (ES35) declined by 0.45%, and the UK’s FTSE 100 (UK100) closed higher by 0.31%.

On Wednesday, silver prices (XAG/USD) plunged by roughly 5%, falling to $59 per ounce and hitting their lowest level since December of last year amid a broad strengthening of the US dollar. With inflation concerns easing and oil prices falling below $70, silver lost its key growth drivers. However, strong industrial demand from green energy and AI‑related infrastructure may prevent the metal from falling below the critical support zone of $55-56.

The US crude oil (WTI) prices fell below the psychological $70 per barrel mark during trading (with lows at $69.63), hitting their lowest levels since late February – the beginning of the conflict’s hot phase. The sharp decline (40% from wartime peaks) is driven by the rapid disappearance of the geopolitical risk premium. After the interim agreement between the US and Iran, shipowners began confidently restoring traffic through the Strait of Hormuz with transponders on, having received official safety guarantees from the UN’s International Maritime Organization (IMO). According to the IEA, exports from the UAE have already recovered to 85% of pre‑crisis levels, while total oil shipments from the Persian Gulf recently reached around 60 million barrels.

On Wednesday, Japan’s Nikkei 225 (JP225) fell by 0.88%, China’s FTSE China A50 closed higher by 0.39%, Hong Kong’s Hang Seng (HK50) rose by 0.33%, and Australia’s ASX 200 (AU200) closed higher by 0.24%. The Hang Seng Index fell to 23,106, retracing the previous session’s gains and hitting its lowest level since June 2025. Investors chose to lock in profits and act cautiously ahead of Hong Kong’s fresh trade balance data, pushing the benchmark to two‑year lows. However, the decline was partially offset by a strong rally in the Asian tech sector.

On Thursday, the Australian dollar (AUD) broke key support and fell below 0.690 USD, settling near a three‑month low amid a powerful global rally of the US dollar. This aggressive decline in the “aussie” occurred despite strong domestic labor‑market data: in May, Australia created 40,300 new jobs after April’s drop of 40,600, while the unemployment rate predictably fell to 4.4%. Nevertheless, the positive employment report only intensified investor concerns about the Reserve Bank of Australia’s next steps, as a strong labor market combined with high core inflation gives the regulator room to continue its tightening cycle.

On Tuesday, the US stock indices closed sharply lower due to a large‑scale sell‑off in the technology sector. By the end of the day, the Dow Jones Index (US30) fell by 1.44%. The S&P 500 Index (US500) declined by 1.44%. The Technology Index NASDAQ (US100) closed down by 3.29% amid growing investor skepticism regarding the profitability of massive investments by major hyperscale companies into artificial intelligence infrastructure. An additional trigger for the decline in chipmakers was the decision by South Korea’s SK Hynix to partially redirect capacity from advanced AI‑chip production toward standard DRAM memory, signaling a potential cooling of demand. Against this backdrop, shares of AI‑race leaders posted sharp losses: Nvidia dropped 4.2%, Broadcom 3.1%, AMD 5.8%, Qualcomm 8%, while Micron and Sandisk plunged 13.2% and 11.2%, respectively. The market capitalization of Tesla and Oracle also fell by 5.8%.

Pressure on the stock market was further intensified by the bond market, where US Treasury yields remained at multi‑month highs, depriving traditional sectors of room for recovery. This occurred despite the continued decline in energy prices, as investors continue to price in the Fed’s hawkish dot‑plot projections.
In June 2026, the preliminary US Services PMI (S&P Global US Services PMI) showed moderate improvement, rising to 51.3 from May’s 50.7. Although the figure slightly exceeded market expectations (51.0) and marked the fastest expansion in the sector since February, the detailed report indicates persistent structural problems. The short‑term boost in business activity was largely driven by the FIFA World Cup, while underlying consumer and investment demand remained subdued due to high prices and the Fed’s tight interest‑rate policy.

European indices mostly declined yesterday. By the end of the day, Germany’s DAX (DE40) fell by 0.98%, France’s CAC 40 (FR40) closed down by 0.71%, Spain’s IBEX 35 (ES35) dropped by 0.34%, and the UK’s FTSE 100 (UK100) ended the session lower by 0.09%.

Global crude oil prices hit a three‑month low: US WTI fell to $73.1 per barrel (with intraday lows at $72.48), while European benchmark Brent corrected toward $77. The main driver of the decline was the 60‑day general sanctions waiver issued by the US Treasury. This step legally opened access for global refineries and buyers to Iranian crude and petroleum products, effectively removing the geopolitical risk premium and pushing prices down 40% from the conflict‑driven peak. The further trajectory of prices will depend directly on institutional factors. Given the Fed’s tight monetary stance under Kevin Warsh and weak global energy demand, full stabilization is possible only after the final signing of the agreement in Geneva, de‑escalation in Lebanon between Israel and Hezbollah, and complete de‑mining of the Strait of Hormuz, which has now restored shipping to 85% of pre‑crisis levels.

On Tuesday, Japan’s Nikkei 225 (JP225) fell by 3.55%, China’s FTSE China A50 closed down by 2.74%, Hong Kong’s Hang Seng (HK50) declined by 1.82%, and Australia’s ASX 200 (AU200) closed lower by 0.33%.

The Australian dollar stabilized around 0.691, holding near its lowest levels in eleven weeks. The newly released macroeconomic inflation report for May left investors with mixed impressions. On one hand, the annual headline inflation rate slowed more than expected – from 4.2% to 4.0% – hitting a three‑month low thanks to a significant drop in retail gasoline prices. On the other hand, core price pressure proved extremely persistent: the volatility‑adjusted Trimmed Mean CPI – the indicator used by the regulator – rose by 0.4% for the month and pushed annual core inflation higher, from 3.4% to 3.6%.

On Monday, the US stock indices closed mixed amid a balance between sell‑offs in the technology sector and geopolitical optimism. By the end of the day, the Dow Jones Index (US30) rose by 0.29%. The S&P 500 Index (US500) fell by 0.37%. The Technology Index NASDAQ (US100) closed lower by 0.19%. The tech sector declined due to investor concerns over rising capital expenditures on artificial intelligence, which led to a drop in Alphabet shares by 5.2%, Palantir by 7%, Amazon by 4.4%, and Meta by 2.7%. Additional pressure on the market came from a 16.4% low plunge in SpaceX shares after the announcement of a debut $20 billion bond issuance, although the stock price still remains 40% above its recent June IPO level.

In May 2026, Canada’s annual inflation rate accelerated to 3.2% from April’s 2.8%, exceeding the analysts’ consensus expect of 3.0% and reaching its highest level since December 2023. The main driver of price growth was the energy sector: amid the Middle East conflict and the suspension of oil exports, gasoline prices surged by 33.2% year‑over‑year, while overall energy costs rose by 9.0%. Despite the jump in the headline figure, core inflationary pressure remains fully under the control of the Bank of Canada. The regulator’s key indicators – CPI‑trim and CPI‑median – remained stable at their target levels of 2.0% and 2.1%, respectively.

European indices mostly rose yesterday. By the end of the day, Germany’s DAX (DE40) increased by 0.62%, France’s CAC 40 (FR40) closed down by 0.25%, Spain’s IBEX 35 (ES35) gained 1.01%, and the UK’s FTSE 100 (UK100) ended the session higher by 0.72%. A powerful trigger for investor optimism was Iran’s statement about significant progress in negotiations with the United States and the signing of a memorandum of understanding on a permanent peace agreement, which sharply reduced the risk of oil supply disruptions and eased global inflation concerns. The banking sector became the locomotive of the market rally: shares of Santander, BBVA, and Nordea rose by about 2% due to falling Eurozone sovereign bond yields, which improved lending margin prospects. The technology sector saw another investment boom, with shares of chipmaker Infineon jumping 5%, supporting the broader trend of hyperscale companies attracting capital for artificial intelligence infrastructure.

On Monday, global crude oil prices (WTI) continued to fall, hitting their lowest level since early March – US WTI dropped below $74 per barrel. The main driver of the sell‑off was news that the US and Iran had agreed on a “roadmap” to reach a peace agreement within 60 days, supported by the US Treasury’s decision to temporarily allow the extraction, supply, and sale of Iranian oil. Expectations of a rapid increase in supply are confirmed by real‑time data: shipping volumes through the Strait of Hormuz have risen noticeably, and Iran has increased visible exports through this route to the highest level since the start of the conflict, while offering discounts on cargoes for China.

The US natural gas price (XNG) corrected downward to $3.23 per MMBtu after a local rally to two‑week highs. The main factor behind the decline was the continued comfortable surplus in the domestic market, supported by the fact that commercial gas inventories in underground storage remain 5.8% above the long‑term seasonal norm.

On Monday, palladium prices (XPD) held near $1,270 per ounce, trading close to their lowest levels since late September amid a decline in geopolitical risk premiums. Progress in US-Iran negotiations and preparations to lift the naval blockade in the Strait of Hormuz significantly eased investor fears about supply disruptions. An additional negative factor for palladium is the deterioration of its fundamental market conditions. After 14 years of persistent deficits, analysts now expect the platinum‑group metals market to shift into surplus in 2026 due to declining investment demand and reduced ETF activity. The situation is further aggravated by long‑term structural changes in China’s automotive sector, where the rapid growth of electric vehicle adoption is undermining palladium consumption, traditionally used in catalytic converters for internal combustion engines.

On Friday, Japan’s Nikkei 225 (JP225) rose by 1.55%, China’s FTSE China A50 closed higher by 2.04%, Hong Kong’s Hang Seng (HK50) fell by 0.65%, and Australia’s ASX 200 (AU200) closed lower by 0.14%.

The Australian dollar fell below the psychological level of 0.70, hitting an eleven‑week low. The main factor behind the weakening of the “Aussie” was the powerful global rally of the US dollar, fueled by hawkish signals from the Federal Reserve and expectations of further rate hikes in the United States. Investors have taken a wait‑and‑see approach ahead of the release of critically important national macroeconomic data that will determine the next steps of the Reserve Bank of Australia (RBA). The May report is expected to show an acceleration in headline inflation to 4.4% (from 4.2%) and core inflation to 3.5% (from 3.4%), significantly exceeding the regulator’s 2-3% target range. Traders are also focused on labor market data: the consensus prediction expects a net job gain of 25,000 and a decline in unemployment to 4.4% after last month’s multi‑year high of 4.5%. Given that the RBA already raised the rate to 4.35% at its May meeting, strong macro data this week may force the regulator to proceed with new rounds of rate hikes in 2026, potentially triggering a sharp reversal and recovery in the AUD exchange rate.