Key facts
- European shares ended lower, with the STOXX 600 down 0.3% on Friday and 0.5% for the week.
- The Dow Jones Industrial Average reached a record closing high.
- Broadcom shares tumbled over 12% after disappointing results and AI chip sales forecast.
- The Japanese yen neared 160 per dollar.
- Foreign investors became net sellers of Japanese stocks last week.
- U.S. equity funds attracted $7.43 billion in the week to June 3.
- Technology sector funds saw $6.62 billion in inflows.
- Assets in leveraged ETFs focused on AI and tech have doubled in two months.
- Brent crude prices remained elevated at $95 a barrel.
- OpenAI has filed for an IPO.
- SpaceX plans a record IPO.
Global equity markets showed a mixed picture, with tech stocks pausing a significant rally amidst geopolitical concerns and economic data releases. European shares ended lower, the STOXX 600 declining 0.3% on Friday and 0.5% for the week, as technology stocks fell 2% after a two-month surge. Brent crude prices remained elevated at $95 a barrel, influenced by Middle East tensions. In contrast, the Dow Jones Industrial Average reached a record closing high, and the S&P 500 reversed early losses to finish higher. However, the Nasdaq Composite edged lower, primarily due to Broadcom's shares tumbling over 12% following disappointing results and a weak AI chip sales forecast. UnitedHealth shares advanced significantly after a Bank of America upgrade.
Asian markets experienced declines, with stocks falling influenced by Broadcom's weak forecast and U.S.-Iran tensions. The Japanese yen neared 160 per dollar, a level that could prompt intervention from Japanese authorities. Foreign investors became net sellers of Japanese stocks last week, ending a two-month buying streak, with concerns over a potential bubble in AI-related stocks cited as the reason for the shift. Japanese hardware stocks are experiencing a surge, leveraging the country's industrial strengths, and Asian banks led sector growth in May.
Stronger U.S. jobs data reinforced expectations of Federal Reserve rate hikes, with markets pricing in a 25-basis-point ECB hike next week. U.S. equity funds attracted $7.43 billion in the week to June 3, the largest inflow in three weeks, driven by AI optimism and strong tech earnings, with technology sector funds seeing $6.62 billion in inflows. Assets in leveraged ETFs focused on AI and tech have doubled in two months, indicating increased investor confidence and a strong bet on the continued rally in artificial intelligence and technology sectors.
Looking ahead, OpenAI has filed for an IPO, and SpaceX plans a record IPO. Microsoft announced an AI breakthrough in quantum computing. Marvell Technology's stock surged over 30% after Nvidia's CEO identified it as a future trillion-dollar company. Lululemon Athletica slid 10% after lowering its annual forecast, while Cooper Companies gained 6% after exceeding estimates.