Investment Daily: US stocks and Treasuries traded mixed

26 June 2026

US stocks traded mixed on Thursday. The S&P 500 ended little changed, while the Nasdaq fell 0.5% on weakness in tech heavyweights.

US Treasuries were mixed and the yield curve steepened modestly following a softer-than-expected mom rise in headline PCE inflation and a solid 7-year Treasury debt auction. 10-year yields closed unchanged at 4.39%, while 2-year yields shed 3bp to 4.12%.

European stocks rose on Thursday as investors digested key US inflation data. The Euro Stoxx 50 rose 0.9%. The German DAX increased 1.0%, while the French CAC closed 0.5% higher. In the UK, the FTSE 100 gained 0.7%.

European government bonds were little changed. 10-year German bund yields and 10-year French bond yields both ended flat at 2.86% and 3.63% respectively. In the UK, 10-year gilt yield rose by 2bp to 4.70%.

Asian stock markets mostly advanced on Thursday, as tech shares led the rallies amid renewed AI optimism following a US chipmaker’s upbeat sales forecast. Japan’s Nikkei 225 and Korea’s Kospi surged 4.6% and 5.4% respectively. India’s Sensex edged up 0.1%, alongside a 0.2% increase in China’s Shanghai Composite. Hong Kong’s Hang Seng bucked the regional trend, closing 1.4% lower on weakness in e-commerce and internet shares.

Crude oil prices rebounded following declines in previous sessions. WTI for August delivery settled 2.3% higher at USD71.9 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.

No major releases.