Investment Daily: US stocks rose amid a rebound in technology shares

31 July 2026

US stocks advanced on Thursday, led by a rebound in technology shares. The S&P 500 rose 1.7% with divergent sector performances.

US Treasuries extended post-Fed curve steepening after PCE inflation data. 10-year yields edged 1bp lower to 4.67%.

European stocks rose on Thursday, aided by upbeat Eurozone GDP data. The Euro Stoxx 50 rose 1.5%. The German DAX gained 0.6%, while the French CAC was up 0.9%. In the UK, the FTSE 100 inched 0.1% lower.

European government bonds ended mixed. 10-year German bund yields edged down 1bp to 3.15%, while 10-year French bond yields fell 2bp to 3.94%. In the UK, 10-year gilt yields fell 6bp to 4.98%.

Asian stock markets traded mixed on Thursday, as investors assessed a mixed set of large tech earnings results, Fed policy signals, and geopolitical headlines. Korea’s Kospi fell 1.2% as investors weighed new government measures to stabilise the market, including limiting retail involvement in leveraged ETFs, while Japan’s Nikkei 225 rose 0.7%. Elsewhere, China’s Shanghai Composite fell 0.6%. Policymakers at the Politburo meeting struck a more supportive tone on the economy and capital markets but showed little appetite for major stimulus. Industrial policy remains front and centre, with AI, industrial upgrading, technological innovation and self-sufficiency being top priorities. Meanwhile, Hong Kong’s Hang Seng was up 0.2% as India’s Sensex ended 0.4% higher.

Crude oil prices fell on Thursday. WTI for September delivery settled 1.0% lower at USD83.6 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 Eurozone, headline CPI inflation likely rose on higher oil and gas prices, with the core rate staying above target amid sticky services inflation.

The Bank of Japan is expected to keep its policy rate unchanged, but persistent inflationary pressure and yen weakness raise the risk of a near-term move.