USA

US equities absorbed a geopolitical shock and still closed the week higher, underscoring the resilience of the AI-led rally. The S&P 500 gained roughly 1% on the week to close Friday at 7,575.39 (+0.42% on the day) and the Nasdaq Composite rose over 1% to 26,281.61 (+0.29%), while the Dow Jones Industrial Average lagged, falling about 0.5% to 52,637.01 and snapping a four-week winning streak — a divergence driven by housing, airline and cruise names that sold off on Wednesday's oil-price spike (PulteGroup and D.R. Horton each fell over 4.5%; American Airlines and Carnival dropped 3–4%) even as chip and AI megacaps such as Nvidia and Meta rallied, with Meta posting a near-15% weekly gain — its best since early 2024 — on reports of improving AI cost economics. The week's marquee event was Friday's Nasdaq debut of SK Hynix, whose ADRs priced at $149 and opened at $170, up roughly 14% and briefly the largest-ever US listing by a foreign company, reinforcing the memory/AI-hardware trade even as it stoked some rotation concern for incumbent US memory names such as Micron. On the macro side, the labor market continued to defy fears of AI-driven job losses: initial jobless claims for the week ended July 4 fell to 215,000, below the 219,000 consensus and the prior week's revised 217,000, though continuing claims rose 8,000 to 1.814 million, the highest since late March, consistent with a “low- firing, low-hiring” equilibrium. Housing showed more strain, with existing home sales unexpectedly falling to a 4.09 million unit annualized pace in June against a 4.19 million estimate, as the run-up in Treasury yields following the oil shock raised mortgage-rate concerns. Consumer fuel costs edged back up — AAA pegged the national average gasoline price near $3.80/gallon — threatening to reverse several weeks of declines just as Q2 corporate earnings season opened, with early reporters such as WD-40 beating estimates and raising guidance, sending its shares up 15%. The CBOE Volatility Index whipsawed between roughly 15 and 16-plus over the week before settling near multi-week lows around 15, reflecting the market's ultimate willingness to look past the Iran headlines toward the AI capital- expenditure cycle.

Europe

European equities were the region hit hardest by the mid-week escalation and closed lower for the week despite a partial recovery into Friday. The pan-European STOXX Europe 600 fell approximately 1.8% and the Euro STOXX 50 dropped around 2%, both retreating from record or near-record levels reached earlier in the year. Germany's DAX 40 was the weakest major index, closing the week down roughly 2.8% (settling Friday at 25,067.09, -0.20% on the day) after tumbling 2.2% on Wednesday alone as chip-exposed names including ASML, Infineon Technologies and Siemens Energy led declines; France's CAC 40 fell about 2.0% on the week to 8,338.97 despite a modest 0.15% Friday gain, and the UK's FTSE 100 declined roughly 1.7% to 10,497.29 even as it eked out a 0.24% advance on the final session. Spain's IBEX 35 was singled out for additional country-specific pressure after President Trump publicly criticized Spain as a “terrible partner in NATO” and threatened to curtail trade and diplomatic engagement, sending the index down as much as 2.7% on Wednesday alone; the IBEX nonetheless closed the week at 19,384.70 (+0.32% Friday, aided by strength in steel producers), trimming its weekly loss to just over 2% and snapping a four-week winning streak that had carried it to fresh highs. Italy's FTSE MIB proved the most resilient of the major bourses, down less than 0.4% on the week. The catalyst throughout was the collapse of the US-Iran ceasefire and the resulting jump in oil prices, which revived inflation concerns just as investors were digesting confirmation that German headline inflation eased to 2.3% in June from 2.6% in May; markets nonetheless moved to price in over 30 basis points of additional European Central Bank tightening this year, with a hike as early as September now seen as plausible should energy-driven price pressures persist. Elsewhere, Dutch household consumption rose 1.8% year-on-year in May, its strongest pace in more than a year, while corporate news flow included a more-than-10% surge in Vodafone shares after Emirates Telecommunications Group (e&) agreed to sell its stake in the UK telecom operator for $5.95 billion — a rare bright spot in an otherwise risk-off week for the region.

Japan

Japanese equities experienced a sharp round-trip over the week, entering a corrective phase early on before staging one of the strongest rebounds in the region. The Nikkei 225 had shed more than 2,900 points over three sessions amid a broader AI/semiconductor de-rating and yen weakness, before turning decisively higher on July 9 (+1.68%, or 1,126 points, to 67,945) and extending gains on July 10 (+1.20% to 68,557.73) as a rally in US semiconductor stocks, a surge in South Korea's KOSPI around the SK Hynix listing, and easing crude oil prices combined to lift sentiment; the broader TOPIX added 0.39% on the week's final session to close at 4,036.08, having briefly touched an all-time high on July 6 before also correcting and recovering. Market breadth remained mixed even as headline indices rallied — on Friday alone, 21 of 33 Tokyo Stock Exchange industry sectors declined even as the Nikkei surged, indicating the advance was concentrated in large-cap AI and semiconductor names such as Advantest, Tokyo Electron and Screen Holdings rather than broad-based buying. On the macro front, data released during the week showed Japanese producer prices accelerating to their fastest pace in more than three years, a direct consequence of the Middle East-driven energy cost shock feeding through an import- dependent economy, while the yen continued to trade near 40-year lows against the dollar, keeping alive market speculation about possible Bank of Japan intervention. In a supportive policy signal, Finance Minister Satsuki Katayama said the government would encourage domestic pension funds to raise their holdings of Japanese financial assets, a move interpreted as aimed at deepening onshore demand for equities. Corporate earnings added some cross-currents: Fast Retailing (Uniqlo's parent) reported results viewed as solid but saw its shares fall as the news was seen as already priced in, while chipmaking- equipment names broadly benefited from the improving global semiconductor narrative. Strategists cautioned that the Nikkei is likely to remain range-bound near the 68,000–70,000 level in the near term pending further clarity from upcoming US inflation and retail sales data.

China

Chinese equity markets diverged sharply over the week, with Hong Kong significantly outperforming the mainland. The Hang Seng Index rose to 24,175.12 on Friday (+0.60% on the day), registering its best weekly performance in more than eight months, supported by renewed appetite for Chinese internet and technology names, a robust Hong Kong IPO pipeline — headlined by Apple assembler Luxshare Precision Industry's secondary listing — and continued momentum in AI-related names such as Zhipu AI (trading as Knowledge Atlas Technology), whose shares have risen more than 1,300% since their January debut even as a six-month cornerstone-investor lock-up expiry loomed. Morgan Stanley noted that Hong Kong and mainland equities had “outperformed regional and global peers” over the week even as volatility spiked elsewhere, while flagging that near-term downside risk was diminishing and that late July/August would be the critical window for a more durable recovery, citing improving e- commerce earnings, progress in AI commercialization, and absorption of pending IPO share-unlock supply. The mainland-focused Shanghai Composite, by contrast, slipped roughly 1% on Friday to 3,996.16 and extended losses into the following Monday (down a further 0.7% to around 3,968) as the CSI 300 fell nearly 2% amid weakness in technology and industrials, more directly exposed to the oil- driven risk-off tone and to China's own soft domestic-demand backdrop. Economic data released during the week showed China's official NBS manufacturing PMI edging up to 50.3 in June from 50.0, beating the 50.1 consensus and marking a third straight month of expansion on the back of resilient high-tech and AI-related export demand, even as the private RatingDog (formerly Caixin) manufacturing PMI eased to a three-month low of 51.7 and foreign sales in that survey contracted for a second consecutive month; the non-manufacturing PMI ticked up to 50.2. Separately, China's June CPI eased to 1.0% year- on-year from 1.2% in May while producer prices fell further into deflation on a monthly basis even as the annual PPI decline accelerated to 4.1%, underscoring the persistent imbalance between resilient supply and still-muted domestic demand that economists expect to keep exerting disinflationary pressure through the second half of the year. Full June trade data, due for release around mid-month, was expected by economists to show continued double-digit export growth — moderating from May's record pace — alongside slowing but still-elevated import growth, as AI-linked hardware demand and US-tariff front-loading continued to offset a soft consumer sector.