Stock Rally Taking a Break: Is It Still Safe or Has It Peaked?
Global stock markets began to catch their breath at the start of Tuesday's Asian session. Japanese and South Korean stock indexes fell from record highs, and Australian stocks also weakened at the open. This came after Wall Street itself closed at an all-time high, with the S&P 500 breaking through the 6,875 area after its best three-day rally since May. Shares of major technology companies also drove the rally, while shares of Chinese companies listed in the US rose around 1.6% on market optimism about US-China relations.
Other assets also moved in a mixed manner. The Japanese yen briefly strengthened again after seven consecutive days of weakness, after the Japanese government said it would monitor the yen's weakening. Gold also rebounded after previously falling more than 3% and dropping below $4,000 per ounce, while the US dollar index weakened again for a second day. US bond yields fell slightly as Treasuries rose slightly in the Tuesday session, a sign that investors were starting to seek safety.
Market sentiment is now entering a "wait-and-see" phase. Investors are bracing for two big events this week: earnings reports from tech giants like Microsoft, Alphabet, MetaTrader, Amazon, and Apple; and the Federal Reserve's policy decision on the next path to interest rate cuts. Amazon itself is reportedly planning to cut up to 30,000 jobs, while Qualcomm surged to a 15-month high after introducing AI chips and devices for the data center market—a move that clearly challenges Nvidia's dominance in the AI sector.
On the geopolitical front, the risk-on mood remains buoyed by hopes for a US-China trade deal. Officials from both countries have prepared a package of agreements to be announced directly by Donald Trump and Xi Jinping when they meet this week, and Trump has said he is "very confident" about the direction of the talks. But analysts caution: the most sensitive issues—national security, technology control, and Chinese investment access to the US—have not been fully resolved. This means the market is euphoric... but the foundations are not yet completely secure. (asd)
Source: Newsmaker.id
