The final week of the financial year opened with a familiar tug of war. A bruising stretch for the artificial intelligence trade had left investors jumpy, yet the pullback proved enough to coax bargain hunters back into the technology names that have powered this market all year. Layer in an uneasy ceasefire between the US and Iran that kept one eye fixed on the Strait of Hormuz, plus the usual quarter-end reshuffling by the big institutional funds, and you have the backdrop for a session that leaned cautiously optimistic without ever quite feeling settled.
United States
A rally across the technology heavyweights lifted Wall Street overnight, with bargain hunters wading back into the sector on a bet that the artificial intelligence investment boom still has room to run. The S&P 500 added 1.2% and the Nasdaq Composite rose 2.1% as the quarter drew to a close, capping what is shaping up as the best three months for equities in six years. A gauge of the Magnificent Seven megacaps, which has lagged the broader market through June, gained 2.6%, and chipmakers clawed back ground after their worst week since April 2025. The resurgence has defied the sceptics, coming through war, an oil supply shock and inflation jitters, and since bottoming three months ago the benchmark has staged one of the swiftest rebounds this century, climbing 20% from its 30 March low to its 2 June peak. That is a feat it has managed only three other times since 2000.
Tesla was a standout, jumping 8.5% after US safety regulators wrapped up a probe into power steering faults. Rocket Lab added 15.9%, with Western Digital, Palo Alto Networks, Lam Research and Seagate Technology also among the gainers. The mood held up despite firmer oil, with President Trump confirming that US and Iran peace talks resume on Tuesday in Doha after both sides agreed to pause a run of tit-for-tat strikes near the Strait of Hormuz.
Bond markets stayed calm after the US Supreme Court ruled that Federal Reserve Governor Lisa Cook can keep her post for now, a decision read at Glenmede as a quiet reinforcement of the central bank’s independence and a modest positive for the long-term rate outlook. Traders at Cboe Global Markets flagged that quarter and half-year end is likely to bring waves of volatility as institutional managers rebalance, while strategists at Miller Tabak argued the tech sector remains the market’s main engine and simply needs to avoid a heavy fall given its weight in the index. Otherwise, the warning ran, retail investors could start shifting toward cash after a year of bubble talk. Bloomberg’s own strategists added a note of caution, pointing out that leveraged equity ETFs tend to buy into strength and sell into weakness, a dynamic that flattered the Nasdaq 100 on the way up but can just as easily cut the other way.
Plenty of corporate activity rounded out the session. Verizon and BT Group agreed to merge their international arms into a joint venture, Comcast set plans to spin off NBCUniversal and Sky, and Rocket Lab struck a deal to buy satellite phone pioneer Iridium at $54 a share. Martin Marietta Materials agreed to combine with Lhoist North America in a $13.5 billion transaction including debt, and Michael Saylor’s Strategy Inc unveiled an overhaul of the financing model behind its Bitcoin programme.
Europe
European equities were subdued, with the Stoxx Europe 600 little changed at the close. Telecoms led the laggards after Bloomberg reported that SpaceX and Charter Communications had held executive talks on a consumer mobile offering, knocking sector heavyweight Deutsche Telekom down 5.4%. Heidelberg Materials tumbled 9.4% and dragged construction names lower after brokers trimmed second-quarter revenue estimates, while tech, media and energy shares finished as the day’s best performers. Under the surface the rotation away from crowded trades continued, with low volatility, ESG and value baskets outperforming over the week while momentum brought up the rear, a sign that European markets have been narrowing the gap with the US as the AI excitement cools.
There were sharp individual moves elsewhere. Nagarro soared 88% after India’s Persistent Systems flagged an €81 a share bid for the German IT services group, and Bridgepoint rose 16% on its first push into US property through the purchase of Florida-based Kayne Anderson Real Estate. KBC Securities noted that markets appear to have already stripped out the geopolitical risk premium despite the weekend headlines. The week ahead brings the European Central Bank’s annual forum in Sintra from 29 June to 1 July, which also features the first public appearance outside the United States by Fed Chairman Kevin Warsh since he took office in May.
Australia
The local market goes into Tuesday on the front foot, with ASX 200 futures up 3 points to 8825 after Wall Street’s tech-led bounce. That follows a 0.7% gain on Monday, when the S&P/ASX 200 closed 59.20 points higher at 8823.40 with eight of the eleven sectors stronger on the second last day of the financial year. Trading volumes were tipped to build as institutional funds rebalance portfolios and lock in capital gains and losses. The technology sector rebounded almost 4%, led by Xero up 4.5% to $72.18, WiseTech Global up 7.2% to $33.82 and Life360 up 11.6% to $26.27.
Healthcare also fired, with Telix Pharmaceuticals up 5.5% to $16.17 and 4DMedical up 10.3% to $4.59. Neuren Pharmaceuticals rocketed 36.1% to $16.60 after European regulators recommended its Rett syndrome drug Daybue for marketing authorisation. The major banks firmed, with NAB and Commonwealth Bank each up 1%, and Judo Capital rebounded 3.4% to 91¢ after last week’s slump. In materials, Fortescue added 2.4% and BHP edged up 1.4%, while utilities lagged as APA Group fell 5.2% and AGL eased 1.1% ahead of year end. Among the smaller movers, Ramelius Resources rose 2.3% to $3.07 after striking a $300 million deal to sell its Edna May gold mine to Forrestania Resources, Karoon Energy climbed 9.1% to $1.37 on the restart of its SPS-92 well and a fresh buyback, and HMC Capital added 2.4% to $3.01 after winning $1.35 billion of private credit mandates from two global institutions. SPI Asset Management summed up the mood by noting that as long as the ceasefire keeps wobbling without breaking and Brent stays contained, the flow machine can keep nudging equities higher into July. The Reserve Bank releases minutes from its June meeting at 11.30am AEST.
Commodities and Currencies
Oil firmed as the Iran talks moved back into focus, with Brent up 1.1% to $72.80 a barrel and West Texas Intermediate up 1.9% to $70.54. Gold slid 1.8% to $4,016.70 an ounce, while iron ore was steady, up 0.1% to $98.85 a tonne. The Australian dollar dipped 0.1% to US68.89¢, leaving it down about 4% for the month. Bitcoin added 1.2% to $60,318. The Japanese yen slipped to its weakest against the greenback since 1986, the euro rose to $1.1426 and the pound climbed to $1.3261. The US 10-year yield held at 4.37%, with the Australian 10-year at 4.74%, and the VIX eased 0.76 to 17.65.
Economic Calendar
AU:
- RBA Policy Minutes 11:30
US:
- Consumer Confidence 00:00
- JOLTS Job Report 00:00
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
