US equities rallied hard to close out the penultimate trading day of the half, with the Dow posting a record close and the Mag Seven gauge jumping 2.6%. The bounce came after chipmakers snapped back from their worst week since April 2025, even as tech ETFs bled a record $9.3bn in outflows. Iran and the US exchanged weekend strikes but both sides signalled a willingness to talk, pulling Brent crude back from the brink. The yen slumped past its July 2024 lows to hit levels not seen since 1986, putting intervention firmly on the table. Gold retreated 1.8% to $4,015, and Bitcoin edged up to $60,402. The Supreme Court ruled that Fed Governor Lisa Cook can stay, shoring up central bank independence just as PCE inflation crept above 4% for the first time in three years.
S&P 500 rose 1.2% to 7,439.26; Dow Jones hit a record close at 52,182.08; Nasdaq 100 surged 2.3%.
Alphabet debuted in the Dow Jones, replacing Verizon — the fifth Magnificent Seven member in the blue-chip index. Shares gained 4.8%.
The yen crashed to 161.94 per dollar, its weakest since 1986, despite the BOJ’s rate hike to 1% and record ¥11.73 trillion in intervention spending.
US–Iran tensions eased after weekend strikes; Trump said Iran requested a meeting in Doha on Tuesday. Brent crude fell 10%+ last week to pre-war levels.
PCE inflation breached 4% last week for the first time in three years, fuelling bets on a Fed rate hike by October.
Tech ETFs saw record $9.3bn in outflows (Deutsche Bank), but the SOX index still sits up 87% for 2026 and chipmakers rebounded sharply.
The Dow Jones Industrial Average closed at 52,182.08, up 0.6% and good enough for a fresh all-time high. The S&P 500 added 1.2% to finish at 7,439.26, while the Nasdaq 100 led the charge with a 2.3% gain. The Nasdaq Composite climbed 2.1% to 25,820.14. MSCI World rose 1%.
Alphabet’s first day as a Dow component went about as well as it could have hoped. Shares jumped 4.8%, making it the fifth Magnificent Seven stock in the 30-stock index after replacing Verizon. The broader Mag Seven gauge gained 2.6%, with the group benefiting from a rotation back into mega-cap tech after last week’s punishing sell-off.
Chipmakers staged a relief rally after their worst week since April 2025. The SOX semiconductor index bounced hard, though it’s still up an astonishing 87% for the year. That didn’t stop investors from yanking cash out of tech funds at a record clip — Deutsche Bank flagged $9.3bn in tech ETF outflows last week, the largest on record.
“The bounce we’re seeing is a welcome development for the bulls,” said Matt Maley at Miller Tabak. “We continue to believe strongly that the action in the tech sector will continue to be the main driver in the stock market.”
Not everyone’s buying it. Keith Lerner at Truist called the move a rebound rather than a breakout, pointing out that it’s concentrated in tech and communication services bouncing from oversold levels rather than genuine broadening. David Laut at Kerux Financial went further: “Staying underweight technology stocks is the name of the game for right now as there may very well be a leadership transition going on within the sector.”
End-of-quarter rebalancing is the wildcard. JJ Kinahan at Cboe warned that institutional fund managers reshuffling portfolios into the close of H1 could send volatility rippling through markets. “Expect some instability, but don’t overthink it,” he said.
- Comcast — announced a spin-off of NBCUniversal and Sky; shares up 4.5%.
- Palantir — gained 2.5% on a new Nvidia partnership for government AI applications.
- Rocket Lab — agreed to acquire Iridium for $54 per share.
- Martin Marietta — to combine with Lhoist North America in a $13.5bn deal.
- Super Micro — fell 8% to $28.17 after Taiwanese authorities raided its local office in a chip smuggling probe.
- Strategy (Michael Saylor) — flagged potential sale of up to $1.25bn in Bitcoin.
The weekend brought a fresh exchange of fire between the US and Iran. CENTCOM launched strikes on Iranian missile and drone storage facilities and coastal radar installations. Iran retaliated with attacks on eight US military bases across the Gulf. But both sides quickly dialled down the rhetoric — Trump said Iran had requested a meeting in Doha on Tuesday, with envoys Witkoff and Kushner set to attend. Iran’s foreign ministry denied any meetings were planned, though markets treated the denial as diplomatic theatrics rather than an escalation signal.
Brent crude had already dropped more than 10% last week to pre-war levels, a dramatic unwinding of the risk premium that had built up over the conflict. Goldman Sachs strategist Kamakshya Trivedi put it succinctly: the collapse of war fears returns markets to a “friendly fundamental/cyclical backdrop but one that is reflected in high valuations.”
On Monday, Brent climbed 1.6% to $73.77 and WTI rose 1.9% to $70.54 — a modest bounce off those depressed levels rather than any fresh panic bid. The incidents involving the Ever Lovely ship and the Kiku tanker kept shipping risk on the radar, but traders seem to be pricing in a de-escalation path for now.
Gold took a breather after its extraordinary run, with spot prices dropping 1.8% to $4,015.59 an ounce. The pullback came as safe-haven demand eased on the Iran de-escalation and the dollar held firm. The Bloomberg Dollar Spot Index dipped just 0.1% on the session, but the greenback is heading for its biggest monthly gain in close to a year as rate hike expectations build.
In currency markets, the euro gained 0.4% to $1.1426 and sterling rose 0.5% to $1.3261. Both moves felt more like end-of-quarter positioning than conviction trades. Bitcoin added 1.4% to $60,401.99, while Ether outperformed with a 3.2% gain to $1,622.08.
Guy LeBas at Janney Montgomery Scott flagged an interesting tension beneath the surface: “The one thing that sticks out to me is that through a period of higher energy prices, consumers have remained resilient in their spending.” That resilience is exactly what’s keeping the Fed hawkish — PCE inflation breached 4% last week, and markets are now pricing in a rate hike by October.
- US 10-year Treasury: little changed at 4.37%
- Germany 10-year Bund: steady at 2.86%
- UK 10-year Gilt: declined 2bp to 4.72%
The Supreme Court’s ruling that Fed Governor Lisa Cook can stay in her seat was a quiet win for bond markets. Michael Reynolds at Glenmede called it a “meaningful positive for the stability of the long-term rate outlook,” removing a tail risk that could have undermined the Fed’s credibility.
The Japanese yen slid another 0.1% to 161.94 per dollar on Monday, slicing past the July 2024 trough of 161.95 and touching its weakest level since 1986. Forty years of yen strength have now been fully erased, and the Bank of Japan looks increasingly cornered.
The BOJ raised its policy rate to 1% on June 16 — the highest since 1995 — but it hasn’t slowed the currency’s slide. Japan has already burned through a record ¥11.73 trillion ($72.5bn) on currency intervention between late April and late May, and it hasn’t stuck. The problem is structural: with US rates still elevated and the Fed potentially hiking again, the yield gap between Treasuries and JGBs is simply too wide for rate differentials to close.
Andrew Hazlett at Monex didn’t mince words: “Intervention is right around the corner if we don’t see a quick correction.” The market’s speculative positioning tells the same story — shorts against the yen remain near record levels, and every failed intervention attempt only emboldens the carry trade crowd.
For Australian investors, the yen’s collapse has implications beyond Japan. A disorderly unwinding of yen carry trades — the kind of move that briefly rocked markets in August 2024 — remains one of the bigger tail risks heading into Q3. Worth watching closely.
The AI trade is getting more complicated. On the hardware side, a memory chip supply crunch is driving DRAM and HBM prices sharply higher. SK Hynix is planning a $29.4bn Nasdaq listing to capitalise on the boom, and Micron delivered blockbuster quarterly results. Apple has already raised MacBook and iPad prices to absorb the memory cost increases — a reminder that the AI infrastructure buildout has real downstream consequences for consumer pricing.
Jake Dollarhide at Longbow Asset Management summed up the growing scepticism: “AI is working for the providers of products such as chipmakers. It is not working for the spenders. That’s why Mag 7 is down on the year.” UBS has already cut exposure to semiconductor and hardware stocks, signalling that the easy money in the AI trade may have been made.
- Anthropic — Claude models now available on Microsoft Azure via NVIDIA GB300 Blackwell Ultra infrastructure.
- OpenAI — reportedly considering postponing its IPO to 2027.
- Super Micro — Taiwan office raided in chip smuggling probe; shares slumped 8% to $28.17.
- Verizon & BT Group — forming a joint venture for international businesses.
- Hyperscalers — issued $60bn in bonds across multiple currencies; AI-related debt now accounts for roughly 15% of investment-grade bond issuance.
That last point deserves attention. Hyperscalers issuing $60bn in bonds to fund AI infrastructure is the kind of capital cycle that can overshoot. When AI-related debt hits 15% of total investment-grade issuance, you’re not looking at a niche trade anymore — you’re looking at a structural shift in corporate balance sheets. If the revenue follow-through disappoints, the credit implications could ripple well beyond tech.
ASX 200 futures are pointing to a flat open, up just 3 points (0.03%) to 8,825. The local market will be watching the RBA’s June meeting minutes due at 11:30am AEST for any hints about the central bank’s next move, particularly in light of the global hawkish tilt.
- Collins Foods — posted record revenue of $1.5bn with statutory net profit surging 280% to $47.1m.
- Catalyst Metals — advancing development at the Trident underground mine.
- IGO — completed the Copper Wolf acquisition in Arizona for approximately $6.15m.
- Capricorn Metals — received federal approval for the Mount Gibson Gold Project.
Kevin Warsh, the new Fed Chair, is scheduled to speak at the ECB’s annual Sintra symposium on Wednesday. Given that PCE inflation just breached 4% and rate hike bets are building, his remarks could move markets. The ECB forum itself runs all week and tends to produce headline-grabbing commentary from central bankers across the globe.
Monday 30 June — Key Events:
- RBA June meeting minutes (11:30am AEST)
- Japan May jobs data
- New Zealand June business confidence
- China June manufacturing PMI
- UK final Q1 GDP
- US Conference Board consumer confidence
- US JOLTS job openings (May)
- ECB annual forum in Sintra (all week)
- France CPI (June preliminary)
- Germany unemployment (June)
- Andy Burnham keynote speech (potential next UK PM)
