US equities staged a broad recovery on Thursday, the S&P 500 closing at 7'438 (+1.7%), the Nasdaq Composite at 25'122 (+2.8%) and the Dow Jones at 52'208 (+1.2%), as softer growth and inflation data eased fears that the Federal Reserve would need to tighten further.
Semiconductors led the rebound, one day after the Nasdaq-100 had entered correction territory. Breadth nonetheless remained narrow, the equal-weighted S&P 500 slipping 0.2% to 8'723, so the index gain was concentrated in a handful of mega-caps.
Europe closed before the bulk of that move: the STOXX 600 rose 0.8% to 650, its best level since 7 July, while the FTSE 100 eased 0.1% to 10'897 and the defensively weighted SMI fell 0.6% to 14'392.
In Asia this morning the Nikkei 225 jumped 4.0% to 64'362, the Shanghai Composite added 0.7% to 3'832 and the Hang Seng slipped 0.2% to 25'818.
Second-quarter GDP growth of 1.5% annualised, below the 2.1% consensus, and June PCE inflation of 3.7% year-on-year after 4.1% in May shifted the debate away from an imminent hike, September odds falling to 59.2% from 82.3% a week earlier. The front end responded, the 2-year Treasury easing to 4.22%, but the long end kept selling off, the 10-year ending at 4.66% and the 30-year at 5.20%, a nineteen-year high, as investors continued to question the Fed's inflation credibility after Wednesday's hold.
Gold closed at $4'103 (+0.9%) and Brent at $89.0 (-1.9%).
