Daily summary: “TACO Moment” supports indices rebound

US

• After the steep declines of recent days, markets finally caught their breath. Indices are rising across the board. Major U.S. stock indexes are up nearly 3%.
• The most important news may once again be comments from D. Trump. During the day, the U.S. president threatened to resume strikes after the latest escalation, but in the evening he announced he had changed his mind and called off the air raids. This scenario, however, seemed to have been partly priced in already, as indices and oil did not react to the U.S. president’s threats earlier in the session.
  • Oracle is supporting sector valuations, even as it falls itself. The company reported Q2 results showing strong revenue growth and profits above market expectations - also in the key cloud/AI segments.
    • However, massive capex frightened investors and the stock fell as much as 11%.
    • The large capex was a burden for the company, but it supported the broader market; semiconductor stocks returned to gains on the back of confirmation that hyperscale companies remain committed to further investment.
  • According to WSJ reports, OpenAI may be preparing for a price war with Anthropic ahead of an IPO.
  • SpaceX is set to go public as soon as tomorrow, and the market consensus appears to be expectations of huge gains at the open. Optimism around the debut is lifting the entire space sector, which is posting strong gains - up to around 10% in some cases. 
  • Mixed PPI data and moderate weakness in the labor market.
  • Core PPI inflation rose to 4.9%, while the headline reading increased to 6.5%. New jobless claims rose to 229k.

Europe

• European indices ended the day with moderate gains, snapping a streak of four declining sessions. The European STOXX 600 rose by about 0.5%.
  • The ECB raised interest rates by 25 basis points, lifting the deposit rate to 2.25%. The decision was widely expected and reflects the risk of inflation pressures becoming entrenched following the rise in energy prices.
  • The Netherlands selected Hensoldt as its supplier of electronic warfare equipment.

Forex

• In the FX market, strength is mainly seen in the Australian and New Zealand dollars, which are up 0.2–0.4% against major currencies.

Commodities

• Oil is testing the USD 90 level, down nearly 5% after de-escalatory comments from D. Trump.
• Rising gas inventories pushed prices lower. NATGAS is testing the $3 level.
• Gold (+2%) and silver (+4%) are gaining. De-escalation in the Middle East implies a more dovish monetary policy, which would support precious metals.
• Among agricultural commodities, sugar is rising the most - by more than 3%, following today’s published supply and demand forecasts.

Crypto

• The return of risk-on sentiment is hitting the crypto market with double force. Strong gains across the board.
  • Bitcoin is up 3.5% and returns to the $63,000 level
  • Ethereum rises more than 4% to above $1,650
  • Solana gains nearly 7% and returns to $66.