Investment Daily: Weakness in large-cap tech stocks weighed on the US stock market

23 June 2026

Large-cap technology stocks weighed on the US stock market on Monday, despite eased geopolitical worries. The S&P 500 fell 0.4%, led by weakness in communication services and consumer discretionary sectors. The tech-heavy Nasdaq lost 1.3%.

US Treasuries fell amid hawkish Fed expectations, despite lower oil prices. 10-year yields rose 6bp to 4.51%.

European stock markets traded mostly higher on Monday. The Euro Stoxx 50 gained 0.3%. The German DAX rose 0.6%, but the French CAC closed 0.2% lower. In the UK, the FTSE 100 closed 0.7% higher.

European government bonds rose. 10-year German and French bond yields fell 3bp to 2.95% and 3.71%, respectively. In the UK, 10-year gilt yields also fell 3bp to 4.81%.

Asian stock markets lacked clear direction on Monday, though AI-related stocks led gains in select regional markets while broader market sentiment remained supported by easing oil prices and geopolitical concerns. Japan’s Nikkei 225 gained 1.5% while Korea’s Kospi rose 0.7%. Elsewhere, China’s Shanghai Composite rallied 1.8% but Hong Kong’s Hang Seng fell 0.7%. India’s Sensex ended 0.4% higher as ASEAN markets generally lagged.

Crude oil prices fell on Monday. WTI crude for August delivery settled 2.3% lower at USD74.8 a barrel.

The Bank of Japan (BoJ) raised its policy rate by 25bp to 1.00%, as widely expected, and decided to halt the reduction in JGB purchases from April 2027. The BoJ highlighted the risk of underlying CPI inflation deviating upward above 2%.

The Reserve Bank of Australia (RBA) kept its policy rate unchanged at 4.35%, as widely anticipated. Governor Bullock noted upside risks to inflation and did not rule out further tightening.

In China, May activity indicators continued to reflect a two-speed economy. Industrial production showed resilience, up 4.5% YOY, driven mainly by gains in high-tech manufacturing and new energy sectors thanks to robust exports. However, non-tech domestic demand was softer than expected as the property sector remained under pressure. Retail sales fell 0.6% YOY, partly reflecting an unfavourable base effect from last year’s trade-in subsidies. Fixed asset investment contracted by 4.1% YOY in the first five months, despite strong advanced manufacturing investment.

In the US, lower energy prices should support business sentiment and a pickup in the composite PMI reading, while price indices are likely to decline.

In the Eurozone, the composite PMI should improve on easing geopolitical tensions, while price indices could soften on declining energy prices.

In the UK, the composite PMI is likely to inch higher, with the positive impact of lower oil prices likely helping offset weak domestic conditions.