Global Markets Slip Amid Yield Surge, China Rate Cuts, and Eurozone Confidence Rebound

Global market sentiment came under renewed pressure on Tuesday as rising U.S. Treasury yields and fiscal concerns triggered risk-off moves across global equity markets. The S&P 500 ended its six-day rally, while European stocks rose on sectoral strength. Meanwhile, China and Australia implemented rate cuts to counteract macroeconomic weakness, and Japan’s bond market saw a fresh wave of volatility. As investors reassess outlooks, global market sentiment remains fragile heading into the week’s key economic data.

🇺🇸 U.S. Market Sentiment Dips Amid Bond Yield Surge

Equities:
The S&P 500 fell 0.4%, Dow Jones dropped 0.3%, and Nasdaq slipped 0.4%. Tech stocks led the decline, with Alphabet and Amazon losing over 1%. Tesla stood out with a 0.5% gain after Elon Musk reaffirmed his CEO position.

Bonds:
Treasury yields surged due to fiscal worries, with the 10-year at 4.479% and the 30-year at 4.967%.

Currency:
The U.S. Dollar Index declined 0.16% to 100.12, showing weakness against major currencies.

🇪🇺 Eurozone Adds Optimism to Global Market Sentiment

Equities:
European stocks rose, with the STOXX 600 gaining 0.7% and markets in Germany and Ireland hitting record highs. Utilities and telecom led the advance.

Bonds:
Eurozone bond yields edged higher amid ongoing fiscal debates and anticipation of economic data.

Currency:
The euro strengthened 0.32% to $1.1280, supported by improved investor sentiment.

Economic Data:
Eurozone consumer confidence improved, rising to -15.2 in May from -16.6 in April.

🇬🇧 United Kingdom

Equities:
The FTSE 100 rose, supported by strong corporate earnings and broader regional strength.

Bonds:
The 10-year gilt yield held around 4.70%, as investors weighed the Bank of England’s rate cut path.

Currency:
The British pound gained 0.27% to $1.34, ahead of key data releases.

🇨🇳 China

Equities:
The Shanghai Composite Index rose 0.38% to 3,380.48 as monetary easing supported sentiment.

Bonds:
The central bank cut the one-year Loan Prime Rate by 10 basis points to 3.0% and the five-year to 3.5%, aiming to stimulate growth.

Currency:
The yuan was stable at 7.2199 per dollar, reflecting a cautious risk tone.

Economic Data:
Youth unemployment declined to 15.8% in April, indicating modest labor market recovery.

🇯🇵 Japan

Equities:
The Nikkei 225 slipped slightly to 37,529.49, pressured by rising bond yields.

Bonds:
Yields on super-long JGBs surged, with the 30-year at 3.11% and the 40-year reaching a record 3.6%.

Currency:
The yen firmed 0.27% to ¥144.11 per dollar, as demand for safe-haven assets rose.

🌍 EMEA (Europe, Middle East, Africa) Markets Reflect Shifts in Global Market Sentiment

Equities:
EMEA markets followed Europe higher, with the STOXX 600 extending its gains led by utilities and telecom.

Bonds:
Regional bond yields moved higher amid fiscal concerns and positioning for data.

Currency:
The euro continued to strengthen, supported by stabilizing economic indicators.

🛢️ Commodities & 🪙 Cryptocurrencies

Commodities:

• Oil: Prices held steady, weighed by demand concerns out of China and geopolitical uncertainty.
• Gold: Rose modestly on safe-haven demand as investors responded to stagflation risks and U.S. debt outlook.

Cryptocurrencies:

• Bitcoin: Up 1.2%, rebounding on increased risk aversion and alternative asset demand.
• Ethereum: Gained 0.9%, following Bitcoin’s lead amid stable network activity.

Top Performers:

• Equities: European utilities and telecoms outperformed broader indices.
• Currencies: The euro and pound showed relative strength against the U.S. dollar.
• Commodities: Gold posted gains on renewed safe-haven flows.