Market developments
Equities: U.S. equities experienced volatility following Moody’s downgrade of the U.S. credit, with the S&P 500 ending a six-day win streak as big tech stocks like Alphabet declined. Emerging market equities gained traction, with JPMorgan upgrading them to ‘overweight’ due to attractive valuations and easing trade tensions. Companies like Target and UnitedHealth saw significant drops, respectively, driven by tariff uncertainty and corporate downgrades.
Fixed Income: U.S. Treasury yields rose, with the 30-year yield briefly surpassing 5%, prompted by Moody’s downgrade and concerns over the U.S. fiscal deficit. Longer-dated treasuries faced selling pressure, contributing to a challenging week for bond markets. Japan’s bond market also showed signs of turbulence, indicating shifting investor appetite with potential global implications.
Commodities: Crude oil prices fell, experiencing a weekly decline as OPEC+ considers increasing output in July, offsetting earlier stability from geopolitical risk assessments. Copper and other base metals like nickel and tin saw modest declines, pressured by weak Chinese demand and a stronger U.S. dollar.