Gains were led by technology, energy, and consumer discretionary stocks, while utilities, real estate, and materials lagged. Chipmakers were a key driver of the advance, with Micron Technology (+9.9%), Nvidia (+1.7%), Marvell Technology (+9.6%), Intel (+11.2%), and Advanced Micro Devices (+5.1%) all posting strong increases.

Investors are now looking ahead to earnings reports from Casey’s General Stores, J.M. Smucker, and Designer Brands, among others, scheduled for release on Tuesday. Later in the week, fresh US CPI and PPI data will provide additional guidance on the Federal Reserve’s interest rate outlook.

In response to higher new orders, firms expanded both staffing and purchasing. Employment grew solidly for the seventh consecutive month, while input buying recorded a modest increase. Supplier delivery times lengthened again, though the deterioration in lead times was less pronounced than in April.

Input costs rose, largely reflecting higher fuel and oil prices linked to the conflict in the Middle East, although the overall pace of cost inflation eased slightly compared with the previous month. Business sentiment also improved from April’s 41-month low, supported by hopes that an eventual end to the war in the Middle East will help strengthen business conditions.

Even so, bullion traded near its lowest level since late March as the US dollar and Treasury yields climbed in the wake of stronger-than-expected US jobs data, bolstering expectations that the Federal Reserve could raise interest rates by year-end. Markets are now assigning more than a 40% probability to a quarter-point hike in December, up from about 14% a month earlier.

Investors are also awaiting this week’s US CPI and PPI releases for further clues on the Fed’s policy path.

The figures compare the change in M2 for the reported month with the same month a year earlier, while the prior reading reflected the change in the previous month against its year-ago level. The uptick from 2.3% to 2.5% suggests slightly stronger liquidity growth in the Japanese financial system, a development closely watched by markets for its potential implications for credit conditions and overall economic activity.

The month-on-month gain in M3 suggests that bank deposits and other liquid assets held by the private sector are still growing, a trend closely monitored by markets for clues about underlying economic momentum and potential inflationary pressures. While the data alone do not define the policy outlook, the persistent rise in money supply will remain a key input for investors and policymakers assessing Japan’s monetary and financial conditions in the months ahead.

The data, updated on 8 June 2026, highlight a significant shift in consumer spending patterns within just one month. The current reading measures the change in sales this May versus May a year ago, while the previous figure reflected April sales against April a year earlier. The move from contraction to growth suggests that some of the pressures that weighed on retailers earlier in the spring may be easing, offering a more positive backdrop for the sector heading into the summer trading period.

Both the current and previous readings are based on year-on-year comparisons, measuring growth in each quarter against the same quarter a year earlier. The latest uptick suggests that the recovery path remains intact, with incremental improvement in overall economic activity as the year progresses. Investors and policymakers will be watching coming data closely to assess whether this trend can be sustained into the second half of 2026.

On a quarter-over-quarter basis, the latest figures show that the second quarter’s positive momentum more than offset the mild decline seen in the first three months of the year. The previous reading of -0.2% had reflected a comparison between the first quarter of 2026 and the final quarter of the prior year, while the new 1.8% figure measures growth in the second quarter relative to the first quarter.

The move from contraction to solid quarterly expansion signals a notable shift in South Korea’s short-term growth trajectory. Investors and policymakers are likely to focus on whether this rebound can be sustained in subsequent quarters as global and domestic conditions evolve.

The local benchmark followed gains on Wall Street, where the Nasdaq and S&P 500 moved higher, helped by a rebound in chipmakers after sharp declines in the prior session amid renewed optimism about AI. Sentiment was also supported by easing geopolitical tensions in the Middle East, after both Iran and Israel signaled they had stopped trading strikes.

Nonetheless, traders stayed cautious ahead of China’s trade balance release later today, a key data point for assessing conditions in New Zealand’s largest trading partner. Early notable gainers included AFT Pharmaceuticals (up 1.1%), Auckland International Airport (1.0%), Channel Infrastructure (1.0%), Briscoe Group (0.9%), and Freightways Group (0.8%).

The latest figures show that the sector has moved from contraction to expansion on a quarter-over-quarter basis. The “actual” reading of 3.6% for Q1 2026 compares the change in the current quarter to the previous one, while the prior -0.5% figure for Q4 2025 measured the change relative to the third quarter of 2025.

The shift into positive territory suggests a notable improvement in manufacturing activity early in 2026, potentially signaling recovering demand and stronger momentum in one of New Zealand’s key industrial segments.

By contrast, inflation eased slightly for food and non-alcoholic beverages (2.9% vs 3.0%) and for alcoholic beverages and tobacco (2.4% vs 2.5%). Communication costs declined at a faster rate (-0.9% vs -0.7%), while education inflation remained steady at 0.5%.

Clothing and footwear prices rebounded, edging up 0.03% after a 0.05% drop in April. Prices for furniture and household goods also increased by 0.4%, reversing a 0.02% decrease in the previous month.

Among chipmakers, Nvidia advanced 1.7%, Broadcom gained 2.8%, AMD rallied 5.1%, and Micron Technology surged 9.9%. Tesla also recorded a strong move higher, climbing 4.6%.

In contrast, the Dow Jones Industrial Average slipped 81 points. Apple fell 1.9% after its next-generation AI platform failed to meet investor expectations, while Microsoft and Visa also lagged, each declining 1.2%.

This inflation backdrop is coupled with a resilient labor market: job growth has remained above recent averages despite the Fed’s expressed concerns about a potential stalling in labor force dynamics. Together, these conditions give the central bank additional room to maintain interest rates at restrictive levels to curb inflation. Interest rate futures continue to signal expectations of a Fed rate hike later this year.

These market moves persisted even as Israel and Iran pledged to hold fire after their weekend escalation, easing energy prices and creating an opening for further talks between Tehran and the United States.

Investor sentiment improved after Iran announced it had concluded its military operation against Israel and Tel Aviv indicated it had paused strikes on Iran. The de-escalation pushed energy prices and bond yields down from their intraday highs and supported appetite for risk assets.

Risk-on positioning was further reinforced by upbeat commentary on chip production from Nvidia CEO Jensen Huang, prompting a rotation back into speculative AI infrastructure names after last week’s pullback. Nvidia gained 1.5%, and shares of Micron, Intel, and Applied Materials jumped about 10%.

In contrast, the Dow slipped slightly into negative territory, weighed by persistent concerns over elevated interest rates. AbbVie, Microsoft, and Visa each declined roughly 2%.

Attention now turns to inflation data due later this week, which is expected to show a renewed acceleration in price pressures alongside robust labor-market growth. Such an outcome would likely reinforce market expectations that the Federal Reserve could deliver a rate hike later this year.

On the corporate front, Tate & Lyle rallied sharply after agreeing to a £2.7 billion takeover by US group Ingredion, which offered 615 pence per share in cash—a substantial premium to its recent trading range. Elsewhere, British American Tobacco advanced roughly 1.5%, HSBC climbed 0.8%, and Shell gained 0.4%, collectively helping to nudge the blue-chip index into positive territory by the close.

Separately, OPEC+ approved a further increase in July oil production quotas of 188,000 barrels per day, despite ongoing supply risks tied to Middle East tensions. Additional data showing a sharp pullback in Chinese imports also tempered supply concerns, as Asia’s largest oil consumer has been drawing down inventories rather than relying on foreign purchases since the conflict began.

Iran declared an end to its military operations in Israel, and Tel Aviv responded by temporarily halting attacks on Iran, allowing talks between Tehran and Washington over an extended ceasefire to resume.

Lower sovereign bond yields in Europe underpinned a rebound in industrials and consumer cyclicals, with Hermes, Ferrari, and Schneider Electric gaining between 1% and 2%. ASML climbed more than 4%, mirroring the recovery in the U.S. semiconductor sector after upbeat comments from Nvidia CEO Jensen Huang.

In contrast, Italian banks closed sharply lower amid renewed uncertainty surrounding mergers and acquisitions in the sector. Intesa Sanpaolo fell 2% after launching a joint bid with BPER Banca for Banca MPS, coming shortly after Banco BPM had put forward its own merger proposal for MPS.

Despite the pullback, aluminum futures remained about 20% higher year-to-date, supported by supply disruptions stemming from the war in the Middle East. The conflict and the resulting naval blockade in the Persian Gulf have effectively halted aluminum exports from the region. Before the war, Gulf producers accounted for roughly 9% of global aluminum supply and nearly 25% of output outside China.

The situation has been exacerbated by direct attacks on the region’s largest refiners, delaying any meaningful recovery in production. EGA’s flagship plant is now expected to return to full capacity only within a year, while operations at Bahrain’s ALBA have been suspended. At the same time, the surge in natural gas prices has driven up refining costs, adding further upward pressure on aluminum prices over the medium term.

While the move is marginal, the uptick underscores a modest rise in short-term borrowing costs for the U.S. government and may reflect subtle shifts in market expectations for near-term interest rate conditions. The 3-month bill is closely watched as a benchmark for short-term funding rates and a barometer of investor sentiment toward U.S. government debt in the very near term.

The updated figure, recorded on 8 June 2026, will feed into broader assessments of the U.S. yield curve and could influence short-term cash management decisions by institutional investors and corporations that rely on Treasury bills as a key liquidity instrument.

While the move represents only a modest increase, the slightly higher stop-out rate signals a marginal rise in short-term funding costs for the U.S. government. The change may also reflect evolving market expectations around monetary policy, inflation, or near-term economic conditions, as investors continue to adjust their demand for short-dated U.S. debt.

By contrast, consumers now anticipate faster price increases for housing (up 0.5 percentage point to 3.5%, the highest since July 2022), food (up 0.6 percentage point to 5.8%), and rent (up 1.4 percentage points to 7.4%).

Inflation expectations at the three-year and five-year horizons were unchanged, at 3.1% and 3%, respectively.

Elsewhere, median one-year-ahead earnings growth expectations held steady at 2.7%, while nominal household spending growth expectations declined by 0.4 percentage point to 5%. In addition, mean unemployment expectations fell by 0.4 percentage point to 43.2%.