Wall Street closes higher on chip momentum
Wall Street rallied on Tuesday, with all three major indexes closing in the green as technology stocks led the charge. The S&P 500 climbed 0.58% to finish at 5,970.37, while the Dow Jones Industrial Average added 214 points to close at 42,519.64. The Nasdaq Composite outperformed, gaining 0.81% to end the session at 19,398.96.
The rally was driven by continued strength in semiconductor stocks, particularly Nvidia, which surged nearly 3%. The AI chip leader extended its Monday gains and briefly overtook Microsoft in market value for the first time since January. Other chipmakers followed suit—Broadcom rose over 3%, and Micron Technology added more than 4%.
Analysts say the prospect of renewed dialogue between US President Donald Trump and China’s President Xi Jinping has lifted investor sentiment.
OECD cuts growth outlook as tariffs bite
The upbeat market tone came despite a sobering global outlook from the OECD. The organisation downgraded its forecast for US growth in 2025 to just 1.6%, citing rising tariffs, weak investment, and policy uncertainty. The US now faces its highest effective tariff rate since the 1930s, driving up input costs and stoking inflation, which is projected to reach 3.9% by late next year.
Australia, the UK, and China also saw their growth forecasts lowered. The OECD singled out falling business investment, rising debt burdens, and weakening consumer sentiment as shared concerns across advanced economies.
Eurozone inflation dips ahead of ECB meeting
In Europe, inflation dropped below the European Central Bank’s 2% target for the first time since September 2024, with headline inflation falling to 1.9% in May. Core inflation eased to 2.3%, driven by a sharp pullback in services prices.
Markets now expect the ECB to cut interest rates by 25 basis points on Thursday.
Commodities and the dollar
Brent crude is trading 1.5% higher at US$65.60 a barrel.
WTI crude is trading 1.38% higher at US$63.38 a barrel.
Spot gold is trading 0.81% lower at US$3,354.32 an ounce.
Gold futures (COMEX) are trading 0.56% lower at US$3,378.10 an ounce.
One Australian dollar is buying 64.67 US cents.
Futures
The SPI futures are pointing to a 24 point rise.
