- Global stock markets recorded the largest quarterly gain since 2020, boosted by the artificial intelligence sector. The MSCI World Stock Index (EURONEXT:IACWI) rose nearly 14% in the second quarter, while the Nasdaq Composite Index (IXIC) surged over 21%.
- International oil prices experienced the largest quarterly decline in several years, as the US and Iran reached a fragile ceasefire and the Strait of Hormuz gradually reopened. Brent crude futures (BRN1!) fell nearly 40% in the second quarter.
- The US Dollar Index (DXY) rose 1.4% this quarter, pushing the USD/JPY exchange rate to a 40-year low of 162.38. The market is closely watching Japanese Finance Minister Katsuyuki Katayama's warnings about market intervention and the Federal Reserve's (Fed) interest rate hike expectations.
AI Boom Drives Global Stock Indices Upward
Driven by technology demand, Asian and US stock markets performed strongly in the second quarter. The Korea Composite Stock Price Index (KOSPI) and the Taiwan Weighted Index (TWSE:TAIEX) rose by 68% and 45%, respectively. The S&P 500 Index (SPX) increased by 0.87% in a single day to 7505.06 points, with bullish market sentiment remaining solid.
Geopolitical Easing Triggers Oil Supply Rebound
As US-Iran tensions eased, geopolitical risk premiums fell. UBS noted that the resumption of operations by some stranded vessels led to a temporary increase in supply, causing Brent crude prices to decline. Morgan Stanley (MS) forecasts suggest that if the current supply trend continues, the global oil market could face a potential surplus of 4.8 million barrels per day by 2027.
Strong Dollar Pressures Gold and Non-US Currencies
With the resilience of the US economy, Federal Reserve (Fed) policymakers generally expect to raise interest rates by the end of the year. This has strengthened the US Dollar Index (DXY), leading to a 14% drop in gold (GOLD) prices this quarter, marking the largest quarterly decline in a decade, while assets in non-US economies like the Eurozone are relatively under pressure.
Yen Pressure Sparks Market Intervention Expectations
The yen fell to around 162.38 against the dollar, prompting verbal intervention from Japanese authorities. Analysts warn that with the upcoming speech by the new Federal Reserve (Fed) Chairman Kevin Warsh and the liquidity squeeze ahead of the US non-farm payroll data release, short positions in the market may face reassessment.
