Global Stocks Hit Record Highs as Oil Prices Plunge 12%

Stocks across the globe reached record highs this week, while crude oil prices experienced a significant decline, highlighting the divergent narratives across different asset classes. The surge in AI-led tech momentum and a surge of overseas inflows boosted U.S. and Asian benchmarks, while European markets saw more modest gains. In the commodities sector, speculation about an increase in OPEC+ supply led to the worst weekly drop in Brent and WTI crude oil prices in nearly two years, dragging down energy shares. A softer-than-expected U.S. core-PCE print helped lower Treasury yields and the dollar, reviving discussions about earlier rate cuts and providing more support for risk assets. Meanwhile, Bitcoin approached new cycle highs as traders debated whether the surge in BTC dominance was clearing the way for a fresh alt-season or crowding it.

The S&P 500 closed at a record high of 6,173, up 2.4% for the week, driven by gains in AI chips and Nike's 15% surge on upbeat revenue guidance. The Nasdaq also hit a fresh high. In contrast, the energy sector lagged due to the slump in crude oil prices. The FTSE 100 inched up 0.4% to 8,799, supported by defensive stocks despite sterling strength capping gains for exporters. Japan’s Nikkei index surged back above 40,000 for the first time since January, finishing the week up 3% as tariff worries eased and a US-China rare-earth pact was announced. The Nifty 50 in India advanced 2.4% to a record 25,638, boosted by foreign institutional inflows, with notable gains in Jio Financial and ICICI Bank. HDB Financial’s US $1.5 billion IPO drew strong demand, and Micron’s upbeat forecast revived sentiment in the AI-hardware sector.

In the commodities sector, oil prices slid by 12% amid talks of increased supply from OPEC+. Copper prices steadied, holding above the $8,800 per tonne support level as China signaled more stimulus for property-linked demand. In the currency markets, the dollar index slipped to a 3½-year low of 97.5 as traders anticipated a dovish successor to Chair Powell and a 63 basis point easing cycle starting in September. The euro strengthened to 1.17 against the dollar, buoyed by better-than-expected Eurozone flash PMIs and fading rate-cut odds beyond July. The yen strengthened to 144.6 from 147 amid lower US yields and month-end exporter flows, while the rupee rallied 0.7% to 85.48 on hefty foreign institutional equity inflows.

Global bond yields dipped as markets anticipated more rate cuts. The US 10-year yield ended at 4.39%, down 6 basis points for the week, after President Trump indicated that his next Fed chair “must favour rate cuts,” reinforcing futures that now price more than 50 basis points in cuts for 2025. The 2-year/30-year yield curve flattened modestly to 3.30% and 4.85%, respectively. In the Euro area, Bund yields slipped 3 basis points to 2.18% as Lagarde signaled a pause after June’s cut. The US core PCE rose 0.2% month-over-month, still above target, keeping July cut odds slim.

In the crypto market, Bitcoin prices reached $107.4 K, up 1.4% for the week, while Ethereum prices were at $2,427, down 0.7%. The total crypto market capitalization stood at $3.29 trillion. The macro theme of BTC dominance at 64% sparked discussions about an “alt-season” as investors rotated into high-beta plays. The US Senate passed the GENIUS Act, the first stable-coin framework, requiring monthly reserve disclosures. Crypto thefts in the first half of the year hit a record $2.1 billion, led by North Korea’s $1.5 billion Bybit exploit, fueling demand for on-chain insurance.

Mixed macro signals emerged as China softened and US inflation cooled. The last week of June saw risk-on equity records even as crude suffered its sharpest weekly loss in two years. Falling real yields, a bruised dollar, and hopes of friendlier central-bank appointments underpinned global risk appetite. However, divergences are widening. Sector rotation saw AI hardware and consumer discretionary lead US gains, while oil majors retreated alongside crude. Japan and India continued to outpace Europe as tariff détente benefited Asia’s exporters and foreign institutional flows chased high-growth emerging markets. Softer gold and bond yields echoed ebbing safe-haven demand, but ballooning crypto hacks and China’s under-50 PMI kept tail-risk premiums alive.

With key Q2 earnings and the July 9 tariff deadline looming, traders head into July balancing liquidity-fueled momentum against policy landmines. The summer narrative could pivot quickly from “breakout” to “shake-out,” requiring traders to stay nimble.