US equities displayed a stark divergence as investors rotated aggressively from technology into traditional cyclicals. The Dow soared 1.34% (48704), marking a fresh closing record and clearing previous resistance levels, driven by financial services sector strength—Visa surged 6% and Mastercard climbed 4.6% after a Bank of America upgrade on improved monetization trends. The S&P 500 edged up 0.21% (6901) to its 37th record close of 2025. The Russell 2000 jumped 1.2% for its ninth all-time high this year, reflecting strong appetite for domestically-focused cyclicals and small-cap stocks. Finally, the tech-heavy Nasdaq Composite fell 1%.
European equities rebounded with the STOXX 600 up 0.5%, reversing earlier weakness as the Fed's dovish messaging outweighed Oracle's earnings miss. Technology stocks remained under pressure across the continent with SAP down 0.8% and ASML down 0.5%, while Rheinmetall fell 0.5% on bidding competition.
Asian markets opened mixed with Japan's Nikkei 225 initially up 0.43% (50818 points), Hong Kong's Hang Seng up 0.66% (25710 points), and Australia's ASX 200 up 0.43% (8616 points), though sentiment remained cautious given overnight tech weakness and Mexico's tariff announcements targeting Chinese goods.
US 10-year Treasury yields fell significantly to 4.13% following the Fed's dovish rate cut and forward guidance, with the 2-year yield declining to 3.52% as the yield curve continued its bull-steepening trend. Fixed income benefited broadly from the easing bias. Gold rallied 1.17% to close near 4275, supported by falling real yields and safe-haven demand amid tech volatility. Crude oil weakness persisted, with WTI falling 1.40% to close around 58, extending month- long declines amid demand concerns.
