European Stocks Rise as Dollar Hits Two-Week Low and Gold Gains Strength
Global stock markets showed mixed trends on the trading day, with European markets opening higher before settling into a mixed pattern. The pan-European Stoxx 600 index traded nearly flat in London but was on track to complete a fourth consecutive weekly gain of about 2%. Technology and utilities stocks led the Stoxx 600 toward a second consecutive record close. In European exchanges, Frankfurt rose 0.4%, Paris was unchanged, and London dipped slightly.
In Asia, South Korean memory chip giants SK Hynix and Samsung Electronics rebounded, helping regional indices climb approximately 2%. Meanwhile, gold prices rose 1.6%, pushing the metal toward its first weekly gain in five weeks, trading near $1,194 per ounce despite a challenging year and a 22% discount from its January peak. The US dollar weakened to a two-week low. US markets were closed for Independence Day, but futures for the Nasdaq 100 rose 1.1%.
On Wall Street, rotation continued with money moving from chip and tech stocks into healthcare and consumer sectors. The S&P 500 fell 0.2%, Nasdaq dropped about 1.5%, and the Dow Jones rose 0.9% to a new high. The US June jobs report showed only 57,000 new jobs added, well below expectations, with unemployment at 4.2%. This labor market softness may increase expectations for Federal Reserve rate cuts later this year.
Concerns arose in the chip sector after reports that Apple is considering sourcing some memory chips from Chinese manufacturer CXMT, potentially impacting existing suppliers like Micron. Additionally, AI company Anthropic is reportedly in early talks with Samsung to develop a dedicated AI chip, signaling a trend of AI firms seeking to reduce reliance on current chip suppliers.
The Roundhill Memory ETF, tracking memory chip companies, ended the week down nearly 15%, marking its worst week since its launch earlier this year. Tesla shares fell despite reporting 480,126 vehicle deliveries in Q2, beating analyst estimates, as investors took profits following a recent rally and reacted to increased capital expenditures and a new short position by investor Michael Burry.
Looking ahead, Q2 earnings reports from Levi Strauss, PepsiCo, and Delta Air Lines are expected next week.