The Nasdaq Composite led gains, climbing 3.9% and ending the week with its 18th record closing high of the year. Meanwhile the Dow Jones Industrial Average was up 1.4% and the S&P 500 gained 2.4%. Within the S&P 500 sectors, technology and communication services were amongst the strongest gainers, seeing record highs. This was supported by a surge in Apple’s shares, particularly on Friday in which it was up over 4% following news that it would invest an additional $100bn in the US, on top of the $500bn already committed.
Another boost to the market came from growing hopes of a September rate cut from the Federal Reserve. Some Fed officials made comments suggesting that rate cuts were on the horizon. On Thursday President Trump nominated Stephen Miran to complete the remainder of Adriana Kugler’s term. Miran is the current chair of the Council of Economic Advisers and could provide a dovish view amongst governors. Attention this week will be on the latest consumer price index report to see how inflation is holding up against tariffs. For the week the yield on the 10-year Treasury note ticked higher, closing up at 4.29%.
European markets also looked beyond tariffs, gaining on corporate earnings as well as hopes for a potential Russia-Ukraine ceasefire. For the week, the pan-European STOXX 600 was up 2.2% in its best performance in 12 weeks. Banks were amongst top gainers, extending the banking index’s outperformance for the year, benefiting from strong earnings and investors seeking out domestically focused equities in the face of tariffs. Amongst regional indices, Germany’s DAX was up 3.2% and France’s CAC 40 added 2.6%. Gains for the UK FTSE 100 were more muted, rising only 0.3%. While the Bank of England cut interest rates by a quarter point to 4% as expected, what was not anticipated was how narrow the vote would be. Swiss equities got off to a cautious start to the week, in their first session since the announcement of Trump’s 39% tariff, but for the week the SMI added 0.3%.
Positive momentum was also seen over in Japan, helped by earnings. The Nikkei 225 rose 2.5% while the broader TOPIX added 2.6%, managing to top 3,000 for the first time. Upbeat earnings from SoftBank helped to support gains. In China, the Shanghai Composite added 2.1% for the week. The latest data revealed that exports rose more than expected, up 7.2% year-on-year in July, ahead of the expiration of its 90-day truce with the US. One notable decliner for the week was India’s Nifty 50, down 1.2%. This came as President Trump signed an executive order doubling tariffs on India to 50% in response to its purchases of Russian oil.