US equity markets rallied on Thursday, with the Nasdaq-100 reaching a new record high, supported by enthusiasm for artificial intelligence (AI) and a bullish outlook from Micron. In Asia, Japan’s Nikkei surged to a six-month high, while weaker Chinese industrial profit data weighed on Chinese markets. European equities showed mixed performance, with defence stocks gaining on NATO's increased spending plans.
US equity markets saw strong performance on Thursday, with the Nasdaq-100 reaching a new record high, closing 0.9% higher at 22,447.29 points, driven by optimism surrounding artificial intelligence and a positive outlook from Micron. The broader S&P 500 rose 0.8% to 6141.02 points, coming within one point of its all-time high. Meanwhile, the Dow Jones Industrial gained 0.9% to 43,386.84 points but remains nearly 1700 points below its record. Investor sentiment was buoyed by hopes of interest rate cuts and confidence in AI's growth potential, despite lingering geopolitical concerns.
In macroeconomics, US real GDP contracted by 0.5% on an annualised basis in the first quarter of 2025, revised down from the previous estimate of a 0.2% decline, according to data released on Thursday by the Bureau of Economic Analysis. The contraction was driven by increased imports and reduced government spending, despite gains in investment and consumer spending.
The Nikkei 225 index climbed 1.4% on Friday, surpassing the 40,000 mark for the first time since January, driven by Wall Street gains and easing concerns over upcoming US tariff deadlines. Tokyo’s core inflation slowed to 3.1% year on year in June, down from 3.6% in May, while Japan’s May retail sales rose 2.2%, the slowest pace in three months.
Meanwhile, other Asia-Pacific markets were mostly lower on Friday, with South Korea’s Kospi falling 0.8% and Australia’s S&P/ASX 200 trading 0.3% lower. Hong Kong’s Hang Seng Index and mainland China’s CSI 300 were both about 0.4% lower after China's industrial profits fell 9.1% year-on-year in May, reversing two months of growth. Data from the National Bureau of Statistics on Friday also showed profits for the first five months of 2025 declined 1.1% compared to the same period last year, following a 1.4% increase in January-April. Key challenges include falling industrial product prices, US tariffs, and a persistent property crisis. While private and foreign firms reported modest profit gains, state-owned enterprises saw a 7.4% drop, highlighting uneven sectoral performance in a fragile economic recovery.
European equities showed mixed performance on Thursday, while defence stocks climbed after NATO announced plans to increase member countries' defence spending to 5% of GDP by 2035. Companies benefiting from the move included Italian aerospace firm Avio, Swedish defence contractor MilDef, and British defence technology company QinetiQ. Germany’s DAX led the region, advancing 0.6% to 23,649.30 points, while France’s CAC 40 was essentially flat. The Euro Stoxx 50, the region’s benchmark, edged down 0.2% to 5243.15 points. Switzerland’s SMI increased slightly.
Corporate news in focus: Quarterly figures from Hornbach Baumarkt. Annual general meeting at SoftBank.
Economic data in focus: UK gross domestic product (08:00), euro-area consumer confidence (11:00).
Global economic and market trends at a glance
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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.