USA

U.S. equities were pressured by a sharp rotation out of AI, semiconductor and megacap technology stocks, despite still-resilient macro data. The BEA’s third estimate showed Q1 real GDP growth at 2.1% annualized, while May PCE inflation accelerated to 4.1% YoY, with core PCE at 3.4% YoY, keeping Fed tightening concerns alive. Initial jobless claims for the week ending 21 June fell to 236,000, suggesting the labor market remained firm. S&P Global’s flash PMI showed continued expansion, with the composite PMI rising to 52.2 and manufacturing PMI to 55.7, but the strength was partly linked to front-loading orders amid supply-chain and geopolitical risks. As a result, the S&P 500 lost around 2.0%, the NASDAQ dropped 4.6%, while the Dow Jones gained 0.6%, helped by lower tech exposure.

Europe

European markets were more resilient than the U.S., although Friday’s global tech selloff weighed on sentiment. Eurozone macro data remained soft: Q1 GDP fell 0.2% QoQ, employment grew only 0.1% QoQ, and May inflation rose to 3.2% YoY, limiting the ECB’s room to ease. The flash eurozone composite PMI improved to 49.5 from 48.5 but stayed below 50 for a third month, while manufacturing held in expansion at 51.3 and services remained weak. Germany was the main drag, with its composite PMI falling to 48.0, the weakest in 18 months. The STOXX Europe 600 ended the week with only moderate gains after hitting record territory earlier, while the FTSE 100, DAX 40, CAC 40 and IBEX 35 were supported by lower oil prices and Europe’s lighter exposure to U.S.-style AI concentration, but gains were capped by weak PMIs and tech-sector profit taking.

Japan

Japan showed strong near-term activity data, but equities corrected sharply after an extended AI-led rally. S&P Global’s flash Japan manufacturing PMI rose to 54.9, while services improved to 51.8 and the composite PMI reached 52.5, supported by new orders, output and employment. Q1 GDP had expanded 0.5% QoQ, and April industrial production rose 0.5% MoM and 2.0% YoY, indicating a steady recovery backdrop. However, inflation pressures from energy and raw materials, yen weakness near multi-decade lows, and profit taking in SoftBank, Advantest and other technology names hit sentiment. The Nikkei 225 fell 4.52% on Friday to 69,095, while TOPIX closed at 3,963.36, reflecting a broader but less severe selloff than the tech-heavy Nikkei.

China

Chinese equities weakened as investors focused on uneven growth, weak domestic demand and global tech volatility. Official May data showed industrial production up 4.5% YoY, while retail sales fell 0.6% MoM, the first monthly decline since December 2022; PPI rose 3.9% YoY, reflecting upstream cost pressure. Industrial profits still grew 21.1% YoY in May, but the gains were concentrated in upstream and AI-related electronics, while property-linked and downstream sectors remained weak. Expectations for June official manufacturing PMI were only marginally expansionary at 50.1, pointing to fragile momentum. The Shanghai Composite fell 2.23% on Friday to 4,028, while the Hang Seng dropped 1.8% to 22,671.86, ending the week down 5.2%, its worst weekly performance in more than a year, as AI and semiconductor names sold off.