Financial Daily: All three major U.S. stock indices declined, U.S. Treasury yields hit a nearly 19-year high, and geopolitical tensions weighed on market sentiment

- Key Focus

– U.S. President Trump stated that the U.S. might launch another offensive against Iran, while Vice President Vance said U.S.-Iran negotiations have made significant progress.

– G7 finance ministers collectively believe that action must be taken now to address trade imbalances.

– The United Nations has lowered its global economic growth forecast for this year to 2.50%.

– The United States will host the G20 Trade Ministers’ Meeting and Leaders’ Summit at the end of September this year.

Content compiled by 'Harbor Family Office,' a subsidiary of Henry Jia Group. It does not constitute any investment or trading advice. Stay tuned.

- Stock Market

[U.S. Markets] All three major U.S. stock indices closed lower, with tech stocks under pressure.

U.S. stocks continued to decline on Tuesday amid a stalemate between the U.S. and Iran and persistently high oil prices, prompting market reactions to inflation expectations. Tech stocks were under pressure, and all three major U.S. equity indices closed lower.

At the close, the S&P 500 fell 0.67% to 7,353.61; the Nasdaq declined 0.84% to 25,870.71; the Dow Jones Industrial Average dropped 0.65% to 49,363.88. The VIX fear index rose 1.40% to 18.07. The Philadelphia Semiconductor Index edged up 0.03% to 11,305.50.

The Magnificent Seven tech stocks index fell 1.16%. Microsoft rose 0.38%, NVIDIA declined 0.77%, Meta, Tesla, and Apple each dropped around 1.4%, Amazon fell 2.08%, and Alphabet A slid 2.34%. The Nasdaq Golden Dragon China Index dipped 0.01% to 6,790.30. Among notable Chinese ADRs, JD.com and PDD Holdings both rose approximately 2.5%. In individual stocks, Taiwan Semiconductor fell 0.84%, Circle declined 0.35%, and SanDisk gained nearly 4%.

[European Markets] Most major European indices rose.

Most major European indices rose on Tuesday. At the close, the pan-European STOXX 600 index gained 0.19% to 611.34, and the EURO STOXX 50 rose 0.04% to 5,851.16.

Germany's DAX 30 index rose 0.38% to close at 24,400.65; France's CAC 40 index fell 0.07% to 7,981.76; the UK's FTSE 100 index gained 0.07% to 10,330.55; and Italy's FTSE MIB index declined 0.65% to 48,354.89.

[Asian Markets] Asian equities were mixed on Tuesday, with South Korea’s benchmark index dropping more than 3%.

Asian stocks were mixed on Tuesday, with South Korea’s benchmark index falling over 3%. At the close, Japan’s Nikkei 225 dropped 0.44% to 60,550.59; South Korea’s KOSPI declined 3.25% to 7,271.66; Singapore’s Straits Times Index fell 1.51% to 5,072.34; and Thailand’s SET Index slipped 0.07% to 1,516.69.

[Hong Kong Market] Hong Kong stocks rose amid volatility, with all three major indices closing higher.

Hong Kong stocks traded volatile on Tuesday before rallying in the final session, with all three major indices closing higher. At the close, the Hang Seng Index rose 0.48% to 25,797.85; the Hang Seng Tech Index gained 0.26% to 4,857.46; and the Hang Seng China Enterprises Index advanced 0.49% to 8,639.96. In sector performance, brain-computer interface概念股 saw notable moves, with BrainCo surging 34.43% and MicroPort NeuroTech rising 3.57%. AI-related stocks continued to retreat, with XunCe falling nearly 10%, Zhipu AI down 9.41%, and Lightelligence and Innoscience each dropping over 8%. Gold stocks declined alongside falling gold prices, as expectations of a Fed rate cut weakened; China National Gold International, Lingbao Gold, and Zijin Mining International all fell more than 3%.

[A-Share Market] China’s A-share markets were mixed, with the Shanghai Composite Index gaining nearly 1%.

China’s A-share market opened lower but rebounded in the final session, ending mixed with the Shanghai Composite Index up nearly 1%. At the close, the Shanghai Composite rose 0.92% to 4,169.54; the Shenzhen Component Index gained 0.26% to 15,569.91; and the ChiNext Price Index slipped 0.16% to 3,908.44. In sector and thematic performance, the semiconductor supply chain rallied significantly during the session, with Shanghai Silicon Industry Group hitting a 20% daily limit up, VeriSilicon Holdings rising 15.57%, and Canchip Microelectronics gaining 12.99%, with multiple stocks up over 10%. The power sector strengthened broadly on positive developments including China’s first large-scale data center participating in spot electricity trading as a virtual power plant; Fuling Electric Power, Shanghai Electric, and Jiantou Energy all hit their daily trading limits. The computing power leasing sector remained strong, with Lianhua Holding and Montnets Technology reaching their daily limit ups. Lithium mining and rare earth sectors declined.

- Bonds

[U.S. Treasuries] U.S. Treasury yields hit a near 19-year high.

U.S. Treasury prices continued to fall, pushing yields to a near 19-year high. At the New York close, the yield on the 10-year U.S. Treasury note rose 7.88 basis points to 4.6663%, while the 2-year note yield climbed 7.44 basis points to 4.1182%.

[Non-U.S. Bond Markets] Sovereign bond yields in major European countries rebounded upward.

Sovereign bond yields in major European countries rebounded, with Germany's 10-year yield rising 4.5 basis points to 3.193%, and its 2-year yield up 4.9 basis points to 2.758%. The UK's 10-year gilt yield climbed 2.7 basis points to 5.126%. France's 10-year OAT yield rose 4.7 basis points, while Italy's 10-year BTP yield increased by 5.4 basis points.

[China Bond Market] Treasury futures rallied across the board on Tuesday

Treasury futures continued their upward trend on Tuesday, closing higher across all tenors. The front-month contract for 30-year treasuries rose 0.56%, the 10-year contract gained 0.15%, the 5-year contract advanced 0.06%, and the 2-year contract edged up 0.02%.

– Foreign exchange

[US Dollar] The dollar index strengthened, with the euro falling more than 0.4%

With U.S.-Iran tensions remaining unresolved and markets seeing little hope for a near-term de-escalation, the dollar rebounded to its highest level since early April. At the New York close, the ICE U.S. Dollar Index rose 0.34% to 99.30, while the Bloomberg Dollar Spot Index gained 0.36% to 1,203.84.

The dollar strengthened against most major currencies: USD/JPY rose 0.13% to 159.04; EUR/USD fell 0.44%; and GBP/USD declined 0.30%.

[Renminbi] USD/CNH traded at 6.8169

At the New York close, the offshore renminbi (CNH) weakened by 176 pips against the dollar from the previous session’s close, trading at 6.8169. The onshore renminbi (CNY) closed 60 pips weaker against the dollar at 6.8039 compared to the prior session’s close.

[Digital Assets] Bitcoin was largely flat, trading in a narrow range around $77,000

On Tuesday, cryptocurrency markets showed notable volatility amid shifting risk sentiment, with Bitcoin trading in a tight range around $77,000 throughout the day.

– Products

[Energy] U.S. crude oil futures prices edged lower

Crude oil prices declined slightly, with U.S. crude futures settling down 0.82% at $107.77 per barrel at the New York close.

[Precious Metals] Precious and base metal prices broadly declined, with gold falling below $4,500

Precious Metals:Gold weakened, dropping below $4,500. At the New York close, spot gold fell 1.83% to $4,482.85 per ounce, while U.S. gold futures declined 1.57% to $4,486.30 per ounce.

Metals Futures Market:Precious and base metals broadly declined, with silver posting significant losses. At the New York close, spot silver dropped approximately 5.1% to $73.7275 per ounce, and U.S. silver futures fell about 4.4% to $74.060 per ounce. U.S. copper futures declined nearly 2% to $6.1925 per pound. Spot platinum fell 3%, and spot palladium dropped 4.1%.

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