Commentary

US technology stocks surged, particularly Micron Technology, which boosted the entire sector with its positive AI demand outlook. Additionally, inflation data showed that the Federal Reserve’s core personal consumption expenditures (PCE) price index rose by only 2.2%, nearing the Fed’s 2% target. U.S. Treasury yields remained stable, while corporate bond issuance saw strong demand, driven in part by China’s economic stimulus.

In Europe, the STOXX Europe 600 Index rose 2.69%, supported by hopes for interest rate cuts amid slowing business activity and China’s stimulus. Germany’s DAX surged 4.03%, and other major European indexes followed suit. However, the Eurozone’s purchasing managers’ index (PMI) fell, signaling contraction in business activity. Germany’s business sentiment also worsened, suggesting the economy may be heading toward a recession. 

China’s stock markets soared, with the Shanghai Composite Index climbing 12.8% after the government introduced significant stimulus measures. The People’s Bank of China (PBOC) reduced reserve requirements for banks and cut key interest rates, aiming to revitalize the economy. Property market support was also emphasized, with promises to stabilize real estate prices and fiscal stimulus measures to boost consumption. Despite these efforts, long-term concerns about China’s slower growth trajectory persist.