On Monday, all three major US stock indices opened lower, influenced by Moody’s downgrade of the US sovereign credit rating on the previous Friday. However, institutional investors generally believe that Moody’s downgrade was based on known data and the existing fiscal situation of the United States, without highlighting any new risks that investors were unaware of. This led some investors to remain optimistic about the prospects of trade negotiations and the profit growth potential of US-listed companies. Stocks in sectors such as healthcare and consumer staples led the gains, driving the three major stock indices to turn higher during the trading session and close slightly higher on the day. By the close of trading, the Dow Jones Industrial Average rose by 0.32%, the S&P 500 Index increased slightly by 0.09%, and the Nasdaq Composite Index rose slightly by 0.02%.
European Stock Markets Fluctuate Amid UK-EU Summit
In Europe, the UK and the EU held their first official bilateral summit since the UK’s “Brexit” on Monday, signing cooperation agreements covering multiple fields such as economy and trade, defense, fishery, and personnel movement. This is expected to “reset” the relationship between the UK and the EU in the future. Boosted by this news, tourism and leisure stocks led gains in stock markets of many European countries, and the three major European stock indices were mixed on Monday. By the close of trading, the British stock market rose by 0.17%, the French stock market slightly declined by 0.04%, and the German stock market increased by 0.70%.
US Treasury Yields Fluctuate Significantly
The bond market experienced significant fluctuations on Monday due to Moody’s downgrade of the US sovereign credit rating on Friday. Moody’s warned that a large-scale fiscal deficit could lead to a deterioration in the fiscal and economic outlook of the United States, triggering investors to sell off US Treasuries. Among long-term bonds, the yields on 30-year and 10-year US Treasuries soared by more than 10 basis points at most during trading on Monday, and the prices dropped accordingly. The yield on the 30-year US Treasury note rose above the 5% mark, while the benchmark 10-year US Treasury note yield once returned above 4.5%, indicating a weakening of investors’ confidence in US Treasuries. Later, the White House disclosed that more trade agreements would be released this week, causing US Treasury yields to fall and prices to stop falling and rise.
International Oil Prices Rise Slightly
In terms of crude oil futures, the progress of the nuclear talks between the United States and Iran has been hindered. The outside world does not expect the United States to lift the sanctions on Iran’s oil exports for the time being. In the short term, the supply of crude oil will not increase significantly. International oil prices rose slightly on Monday. By the close of trading, the price of light crude oil futures for June delivery on the New York Mercantile Exchange closed at $62.69 per barrel, up 0.32%. The price of Brent crude oil futures for July delivery in London closed at $65.54 per barrel, up 0.20%.
International Gold Price Rises Significantly
In terms of precious metals futures, the international gold price dropped by approximately 4.7% last week, marking the biggest weekly decline in half a year. Some investors rushed to buy at a low price on Monday. Meanwhile, some investors who reduced their holdings of US dollar assets flocked to gold for hedging. These factors pushed the international gold price to rise significantly on Monday. By the close of trading, the June gold futures price on the New York Mercantile Exchange closed at $3,233.5 per ounce, up 1.45%.
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