Daily Summary: Markets Show Tentative Recovery Amid Bond Pressure

US500 remained little changed while US100 gained 0.4% and US30 stayed flat as technology stocks led a modest recovery from Wednesday's selloff that had seen markets tumble on bond market turmoil.

Bond vigilantes continued pressuring global debt markets as House Republicans narrowly passed Trump's tax bill by a single vote, with the legislation expected to add $3.8 trillion to the deficit over the next decade.

10-year Treasury yields declined 4 basis points to 4.56% after Wednesday's spike, though 30-year yields remained elevated near 5.09% as investors demanded higher compensation for lending to governments with rising debt burdens.

Treasury Secretary Scott Bessent acknowledged the US debt path is "unsustainable" while warning of potential investor "rebellion" at an unknown tipping point, as the debt-to-GDP ratio now stands around 100% with annual interest payments of $880 billion exceeding the defense budget.

Bitcoin surged to a new all-time high above $111,000, rising 2.7% to $111,256 as investors sought alternatives to traditional US assets amid fiscal concerns and the "Sell America" narrative following Moody's credit downgrade.

US business activity improved as trade-related anxiety eased though initial jobless claims dropped to the lowest level in four weeks, while existing home sales unexpectedly fell to the slowest pace in seven months.

Snowflake soared 10% after posting its first $1 billion revenue quarter and providing strong guidance above Wall Street expectations, demonstrating continued enterprise software spending despite economic uncertainty.

Target slumped 4% after slashing annual sales forecasts and now expecting a low-single digit sales decline, citing consumer pullback on discretionary purchases and negative reactions to its DEI policy changes in January.

Ralph Lauren gained 2% despite forecasting tepid growth and weighing price increases to offset tariff impacts, as the company sources 96% of its products overseas with 12% coming from China.

Justice Department opened an antitrust probe into Google's AI partnership agreements, while UnitedHealth and Humana fell on Trump administration plans for expanded Medicare audits of private health plans.

Nike announced its return to Amazon's platform after a 2019 exit as part of growth renewal efforts, while AT&T agreed to acquire Lumen's consumer fiber operations for $5.75 billion to expand broadband coverage.

Oil prices fell over 1.5% on reports of potential OPEC+ production increases for July, with WTI dropping to $60.84 and Brent to $63.98 as the cartel considers boosting output.

PMI data from Europe turned out to be mixed. France reported a reading in line with expectations, with all indicators remaining below the key 50-point threshold. In Germany, the composite PMI came as a surprise, unexpectedly dropping to 48.6 points (compared to the forecast of 50.4 points).

Germany’s IFO business sentiment data showed a slight improvement compared to the previous month. The conditions index rose as expected to 87.5 points (from 86.9 previously), expectations increased to 88.9 points (from 87.4), and the current assessment index declined only slightly by 0.3 points to 86.1.

Initial jobless claims in the U.S. matched expectations, coming in at 227,000, which is roughly unchanged from the previous week.

PMI indices in the U.S. indicated strengthening in both services (52.3 vs. 50.6 in April) and manufacturing (52.3 vs. 50.2). This reading remains surprisingly strong, particularly in light of concerns about the long-term impact of trade tariffs on the U.S. economy.

Dollar Index edged up 0.1% with the euro falling 0.4% to $1.1286 and the yen weakening slightly to 143.86 per dollar, while Ethereum surged 6.7% to $2,677 alongside Bitcoin's rally.