The U.S. and global equity markets surged this week spurred by investor optimism for the Iran-Israel ceasefire and a China-U.S. trade agreement. U.S Commerce Secretary Howard Lutnick has indicated the possibility of 10 more agreements with U.S. trading partners being signed in the near future. OPEC+ is set to raise Crude supplies from August, putting downward pressure on oil prices. The U.S. joined the Iran-Israel conflict this week by bombing three nuclear sites in Iran. Iran responded by launching an attack on the U.S. airbase in Qatar. President Trump later announced a ceasefire between Israel and Iran. In Europe, the European Union (EU) and Canada entered a security pact facilitating joint procurement of military resources. NATO leaders met in Hague this week to discuss a defence spending target of 5%. Spain was the only holdout to the spending decision.

Global Updates
  • The MSCI All Country World Index jumped this week driven by the recovery in U.S. equity markets driven by growing investor optimism regarding the Sino-U.S. trade agreement and hope for reduced tariffs. Defence stocks also rose due to the higher spending agreement by NATO members. 
  • The EU has announced its plans to impose retaliatory tariffs on U.S. imports including Boeing aircrafts, if the U.S. imposes a baseline tax on EU exports
  • Germany has announced its plans to raise 19 billion euros in debt in the third quarter to finance its defence and infrastructure expenditure. 
  • The German automobile parts manufacturer Continental has lowered its profit guidance for 2025 to the 10.5% to 11.5% range due to currency effects and trade tariffs.  
  • UBS will be commencing its $2 billion share buyback program from July 1st. 
  • The Canadian senate has approved Prime Minister Mark Carney’s bill to fast-track projects which are essential for national interests. 
  • Canada’s consumer inflation remained in line at 1.7% for May due to drop in gasoline costs.
  • Copper prices rose this week due to a surge in copper imports by the U.S. due to inventory building ahead of proposed tariffs. The price surge was also pushed by the strong demand for Copper from China.  
  • OPEC+ countries have signaled their plan to regain their market share by increasing production by 411,000 barrels per day in August. The news has weighed on crude prices since its announcement.
U.S. Equity
  • The S&P 500, Dow Jones and Nasdaq rose sharply this week. The S&P 500 Index reached a new record 6,173 benchmark on Friday. U.S. Commerce Secretary Howard Lutnick announced that the U.S. and China have agreed to a trade framework along with lower tariffs and resumption of access to rare-earth minerals. He also mentioned that agreements with 10 major trading partners are in the pipeline. China’s ministry of commerce also confirmed the agreement on a trade framework in London earlier this month.  
  • President Trump has indicated the end of trade talks with Canada due to the adoption of a digital services tax by Canada under which all technology companies operating in Canada would be taxed. 
  • Senate Republicans have removed the Section 889 provision, also called the ‘Revenge Tax’ provision from the Federal Tax Bill, on the request of Treasury Secretary Scott Bessent. 
  • Nike’s stock price rose after the company posted a larger-than-expected fourth quarter (fiscal) revenue of $11.1 billion. However, the company reported a 14% drop in direct sales and a 26% drop in online sales for the same period. The company reportedly plans to raise prices as well as reduce its production in China after losing $1 billion in additional costs due to tariffs.
  • Tesla’s stock price jumped following the launch of its Robotaxi service in Texas. Tesla plans to expand its service to other locations by the end of 2026.
  • Evercore ISI raised the price target for Arista Networks in expectation of a revenue jump from its collaborations with Meta and other cloud services. 
  • Super Micro Computer’s stock price dropped after the company announced its intention to issue convertible notes worth $2 billion.
  • Northern Trust has rejected a merger proposal by the Bank of New York Mellon, reiterating its commitment to remain independent and deliver long-term value to its stakeholders. 
  • Meta stock price rose after the company was reportedly interested in acquiring PlayAI, a startup which specializes in replicating voices using AI.  
  • The Trump administration is currently planning to sign executive orders which will regulate and authorize energy infrastructure necessary for AI development and expansion in the U.S.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose this week.
  • The U.S. 10-year Treasury yield fell to 4.283% and the yield on the 2-year note also lagged to 3.74% over the week. 
  • The U.S. Dollar Index depreciated slightly to 97.25 this week.

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