Financial Daily: U.S. June CPI cooled more than expected to 3.5% YoY; Nasdaq rose nearly 1%—how did Chinese ADRs and A-shares perform?

– Hot Topics

– U.S. June CPI cooled more than expected, with annual headline inflation dropping to 3.5% and core CPI slowing to 2.6%, causing market expectations for a July Fed rate hike to plummet.

– Fed Chair Waller testified before Congress for the first time, reiterating his stance on combating inflation.

– Trump withdrew his proposal to impose a 20% transit fee on the Strait of Hormuz and is now seeking investment agreements with Gulf states instead.

– Major Wall Street banks reported strong quarterly results, with Citi, Goldman Sachs, and others posting broad-based profit growth, driven by standout performance in investment banking and trading businesses.

Content compiled by Harbor Family Office, a subsidiary of Henry Jia Group. This does not constitute investment or trading advice. Please take note.

– Stock Market

【U.S. Market】CPI data boosts rate-cut expectations; Nasdaq rises nearly 1%

Tuesday's U.S. June CPI data came in significantly below market expectations, with core inflation easing to 2.6%, substantially weakening the case for a Fed rate hike in July. Following the release, market risk appetite clearly improved, and all three major U.S. equity indices closed higher. The Nasdaq outperformed, led by strong gains in AI hardware stocks, while the Dow’s advance was sharply curtailed by IBM’s stock plunging 25% after disappointing earnings.

At the close, the S&P 500 rose 0.38% to 7,543.59; the Nasdaq Composite gained 0.90% to 26,107.008; and the Dow Jones Industrial Average edged up 0.02% to 52,508.27. The VIX fear index declined 3.85% to 16.50. The Philadelphia Semiconductor Index jumped 2.54% to 12,661.93.

The index of the Magnificent Seven U.S. tech stocks rose 0.97%. NVIDIA led the pack with a 4.06% gain; Alphabet A climbed 1.99%; Meta advanced 0.66%; Tesla rose 0.36%; and Amazon edged up 0.07%. Apple and Microsoft bucked the trend, falling 0.77% and 1.55%, respectively. The Nasdaq Golden Dragon China Index dipped slightly by 0.11% to 6,105.95. Among notable Chinese ADRs, Baidu dropped 3.3%, Alibaba rose modestly by about 0.1%, and Tencent gained 0.5%. On an individual stock basis, Circle rose 0.33%.

【European Market】Pan-European index rebounds from a lower open as U.S. CPI data lifts sentiment

Major European indices opened lower on Tuesday but steadily recovered, showing a clear jump upward upon the release of U.S. CPI data. The pan-European index stabilized near session lows for the fourth consecutive trading day. At the close, the STOXX Europe 600 rose 0.17% to 642.10, while the EURO STOXX 50 gained 0.15% to 6,280.19.

Germany’s DAX 30 rose 0.13% to 25,147.03; France’s CAC 40 gained 0.03% to 8,366.85; the UK’s FTSE 100 climbed 0.30% to 10,529.39; and Italy’s FTSE MIB advanced 0.10% to 52,862.50.

【Asian Market】Asian equities mostly closed higher on Tuesday, with Japanese and Korean benchmarks each rising around 0.7%

Asian markets broadly strengthened on Tuesday, with Japan and South Korea rebounding into positive territory during the session. At the close, Japan’s Nikkei 225 rose 0.74% to 67,743.50, and South Korea’s KOSPI gained 0.73% to 6,856.83. Singapore’s Straits Times Index climbed 0.46% to 5,495.61, while Thailand’s SET Index underperformed, slipping 0.11% to 1,626.03.

【Hong Kong Market】All three major Hong Kong indices closed higher, with the Hang Seng Tech Index turning positive intraday

Hong Kong stocks opened higher on Tuesday but came under pressure intraday, with the Hang Seng Tech Index一度 falling more than 2%. However, capital flowed back in the afternoon, driving the index to recover and turn positive. At the close, the Hang Seng Index rose 0.52% to 24,340.73 points; the Hang Seng Tech Index gained 0.06% to 4,679.46 points; and the Hang Seng China Enterprises Index advanced 0.46% to 8,103.08 points. In sector performance, PCB and memory chip-related stocks stood out: Kingboard Laminates surged 14.20%, Guanghe Technology climbed 11.32%, and Kingboard Chemical rose 8.84%. Memory chip stocks also rebounded sharply, with Gigadevice up 9.54% and Montage Technology rising 8.01%. Non-ferrous metals and pharmaceutical sectors showed strength, with Aluminum Corporation of China gaining 9.59%, China Hongqiao up 7.08%, Joinn Laboratories rising 7.66%, and Pharmaron advancing 6.31%. Meanwhile, AI application-related stocks continued to retreat, with Baidu Group down 7.26%, Kingsoft Cloud falling 6.92%, and Zhipu AI declining 2.74%.

[A-Share Market] The three major A-share indices opened lower but rallied strongly, with the ChiNext Price Index surging over 3%.

On Tuesday, mainland China’s A-shares opened lower but staged a strong recovery, with notable gains in the Shenzhen Component Index and the ChiNext Price Index. At the close, the Shanghai Composite Index rose 1.36% to 3,967.13 points; the Shenzhen Component Index gained 2.77% to 14,924.87 points; and the ChiNext Price Index jumped 3.43% to 3,851.14 points.

In terms of sectors and themes, the computing power hardware supply chain surged broadly, with PCB-related stocks leading a rally—Zecheng Electronics surged by its 30% daily limit, while Dongshan Precision, Guanghe Technology, and Shengyi Technology all hit their daily trading limits. Oil & gas-related stocks remained active, with Tongyuan Petroleum soaring by its 20% daily limit, and Zhongman Petroleum and LanYan Holdings also hitting their daily limits. Pharmaceutical distribution stocks continued to rise, with Yaoyigou surging 20% and Renmin Tongtai reaching its daily limit. Coal, industrial metals, rare earths, and glass & fiberglass sectors also ranked among the top gainers. In contrast, aerospace equipment and defense electronics sectors underperformed, leading the market decline.

- Bonds

[U.S. Treasuries] CPI Data Triggers Sharp Move in Bond Market; 2-Year Treasury Yield Plunges Nearly 10 Basis Points

June U.S. CPI data came in broadly below expectations, triggering a strong reaction in the Treasury market. The 2-year Treasury yield plunged nearly 10 basis points in a single day, as market bets on near-term Fed rate hikes rapidly unwound. The 10-year Treasury yield declined more modestly.

At the New York close, the U.S. 10-year Treasury yield fell 5.03 basis points to 4.5734%, while the 2-year Treasury yield dropped 9.86 basis points to 4.1829%.

[Non-US Bond Market] Yields on government bonds in major European countries generally rose

European sovereign bond markets generally moved higher on Tuesday. At the New York close, Germany's 10-year Bund yield rose 0.5 basis points to 3.113%, and the 2-year Schatz yield increased 3.3 basis points to 2.756%. The UK 10-year Gilt yield rose 0.8 basis points to 4.977%. France’s 10-year OAT yield climbed 0.7 basis points to 3.892%, and Italy’s 10-year BTP yield gained 1.2 basis points to 3.884%.

[China Bond Market] Treasury Futures Recover Losses After Opening Lower

On Tuesday, China’s treasury futures opened lower but gradually recovered losses, ending the session with a choppy upward trend. At the close, the front-month 30-year treasury futures contract edged up 0.02%, the 10-year contract was flat compared to the previous trading day, the 5-year contract rose 0.01%, and the 2-year contract was unchanged from the prior session.

– Foreign exchange

[USD] The US dollar weakened significantly, with the ICE U.S. Dollar Index falling below the 101 mark.

The US dollar index declined sharply on Tuesday after June U.S. CPI data came in broadly below expectations, causing market expectations for Federal Reserve rate hikes to cool rapidly and triggering a wave of dollar selling. The DXY plunged immediately after the data release, briefly dropping to a session low near 100.60. Although it later recovered some ground, it still posted a notable decline.

At the New York close, the ICE U.S. Dollar Index fell 0.32% to 100.913, trading within a range of 101.322 to 100.607 during the session; the Bloomberg Dollar Spot Index dropped 0.37% to 1,217.78.

The dollar weakened broadly against major currencies: the euro rose 0.36% against the dollar to $1.1423; sterling gained 0.27% to $1.3385; the dollar fell 0.66% against the Swiss franc to 0.8093; the Australian dollar climbed 0.79% against the greenback; and the dollar slipped 0.17% against the yen to ¥162.15.

[CNY] The offshore yuan traded at 6.7740 per US dollar.

At the New York close, the US dollar was down 111 pips from the previous session's close against the offshore yuan, trading at 6.7740. Onshore, the yuan closed officially at 6.7779 per dollar, up 38 pips from the prior day’s official fixing.

[Digital Assets] Risk-off sentiment cooled, driving a significant rally in digital assets.

The cryptocurrency market rallied sharply on Tuesday as softer-than-expected U.S. CPI data significantly boosted risk appetite, propelling Bitcoin rapidly toward the $65,000 level. By the New York close, Bitcoin had risen 4.4% to $64,817.40; Ethereum gained 6% to $1,874.79; and Solana advanced approximately 3.4%.

– Products

[Energy] Oil prices surged then pulled back; WTI crude futures rose 1.54%.

International oil prices surged then retreated on Tuesday. U.S. announcements of renewed sanctions reimposing blockades on all Iranian ports initially drove a sharp spike in prices. However, Trump later announced he was withdrawing his proposed 20% transit fee for the Strait of Hormuz and instead seeking investment agreements with Gulf states—a statement that triggered a significant pullback from the highs. At the New York close, WTI crude futures settled up 1.54% at $79.34 per barrel; Brent September crude futures rose 1.72% to settle at $84.73 per barrel.

[Precious Metals] The precious metals market weakened overall, with gold prices falling below the $4,000 mark.

Precious Metals:Spot gold prices surged sharply on Tuesday, as U.S. CPI data came in broadly below expectations, sending the dollar lower and providing strong support for dollar-denominated gold. By the New York close, spot gold was up approximately 1.25% at $4,052.31 per ounce, while U.S. gold futures rose 1.29% to $4,057.20 per ounce.

Metals Futures Market:Spot silver rose 1.79% to $58.6896 per ounce; spot platinum gained 1.50%; and spot palladium climbed 4.10%.

[Disclaimer]

The above content is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office"), summarized from various market information sources. Harbor Family Office and its group members did not participate in preparing the content nor explicitly or implicitly endorse it. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently assess and judge this material and are advised to seek professional opinions before making any related investments or trades. Without authorization, no one may reproduce, copy, or publish this content in whole or in part to the public in any manner. Copyright belongs to Harbor Family Office and related providers.

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