World markets displayed varied movements on Friday following the Dow Jones Industrial Average reaching a new record. Certain AI-related stocks saw an increase, while others continued to experience declines. The future for the S&P 500 rose by 0.3%, whereas the future for the Dow decreased by 0.2%. U.S. markets closed Friday in observance of the Independence Day holiday.
European Market Movements
In Europe, Germany’s DAX increased by 0.4% hitting 25,667.73, while the CAC 40 in Paris slightly declined by 0.1% to 8,471.19. In Britain, the FTSE 100 dropped by 0.4% to 10,613.55.
Asian Market Reactions
The Asian markets showed signs of recovery after previous declines. South Korea’s Kospi, which fell nearly 8% the previous day, surged by 5.8% reaching 8,088.34. Samsung Electronics, a leading producer of computer chips, saw an increase of 8.2%; its competitor SK Hynix enjoyed a rise of 10.9%.
In Tokyo, the Nikkei 225 increased by 1.5% to 69,744.07. Tokyo Electron, a chip manufacturer, rose by 0.4%, while memory producer Kioxia jumped 9.2%. Hong Kong’s Hang Seng grew by 1.3% to 23,350.03, and the Shanghai Composite went up by 0.4% to 4,043.64. Taiwan’s Taiex increased slightly by 0.1%, and India’s Sensex went up by 0.4%. The S&P/ASX 200 in Australia rose by 1.4%, reaching 8,844.40.
Stephen Innes from SPI Asset Management commented on the Asian markets, highlighting recovery after challenging sessions dominated by tech stock declines.
U.S. Stocks and Economic Insights
On Thursday, U.S. stocks generally increased as the Dow set another record, gaining 1.1% to reach 52,900.07. Declines for chip companies and AI sector winners resulted in mixed indexes. The S&P 500 remained almost unchanged, rising marginally by less than 0.1% to 7,483.24, despite the majority of stocks within the index showing positive results. The Nasdaq composite dropped by 0.8% to 25,382.67.
A report indicated U.S. employers added 57,000 jobs in the previous month. Although this positively impacts the economy, it fell short compared to the expected 100,000 jobs, showing slower hiring compared to May. This result might ease inflation concerns, which have escalated globally due to rising oil prices amid the conflict with Iran. With recent declines in oil prices post-war, if inflation reduces in forthcoming months, the Federal Reserve may decide against further interest rate hikes.
Lower interest rates generally benefit investors as they reduce borrowing costs for both households and businesses, and often lead to increased stock and investment prices.
Crypto Industry and Stock Dynamics
Crypto-related stocks demonstrated strength after Bitcoin’s price rose by approximately 2%, following a dip near its lowest level since 2024. Robinhood Markets and Coinbase Global increased by 3.8% and 3.9% respectively. Bitcoin’s value grew by 0.9% early Friday.
Sell-offs in chip company stocks have impacted index levels. Concerns that their share prices surged excessively during the AI buzz are prevalent, as there’s uncertainty about the profitability and productivity growth from substantial investments in chips and data centers. Micron Technology, for instance, fell by 5.5% after an earlier gain, following a 10.6% drop the previous day. Nvidia decreased by 1.4% and Lam Research by 10.2%, dragging the S&P 500 due to their sizes amid AI trends. Nvidia possesses an enormous value nearing $4.7 trillion, contributing more influence on the S&P 500 than any other stock.
Commodity and Currency Updates
Early trading also showed Brent crude, the global benchmark, falling slightly by less than 0.1% to $71.76 a barrel. U.S. benchmark crude declined by 0.2% to $68.48 a barrel.
The dollar rose against the Japanese yen to 161.14 from 161.11. The euro increased to $1.1451 from $1.1431.