Deutsche Bank analysts highlight an upbeat sentiment in Asian markets, with the KOSPI and Nikkei advancing alongside Nasdaq futures following strong tech-led gains in the US. The institution notes that the NASDAQ and the Magnificent 7 reached record highs, keeping the S&P 500 afloat despite broader weakness across blue-chip stocks. Meanwhile, European equities also largely tracked this positive momentum.

Equities rally as PPI pressures build

"Markets have been moving much faster than my bus over the last 24 hours though, with US equities last night surging to new highs, with the S&P 500 advancing +0.58%. That was led by fresh gains for tech stocks, with the NASDAQ (+1.20%) and the Magnificent 7 (+2.00%) reaching record highs of their own."

"That said, it was not all good news, with nearly two thirds of the S&P 500 actually declining yesterday as blue chip names underperformed. A key challenge was an incredibly strong PPI inflation print, which led markets to price a growing chance of Fed rate hikes."

"By the close, fed funds futures were little changed, pricing a 40% chance of a hike by year-end, while 2yr yields were down -1.1bps on the day. Yields still inched higher further out the curve, with the 10yr yield (+0.6bps) reaching its highest level since last July at 4.47%, while 30yr yields were up +0.9bps to 5.03%."

"The drop in oil helped European stocks mostly match US gains, as the STOXX 600 (+0.79%) advanced alongside the DAX (+0.76%), the CAC 40 (+0.35%), and the FTSE MIB (+1.00%)."

"The KOSPI is up over a percent and the Nikkei, alongside Nasdaq futures, are up around two-thirds of a percent. European futures are up nearly a percent but it's still early in the session and perhaps a few hours before you wake up and read this. Obviously the world awaits news from the first Trump/Xi meeting today."

"Meanwhile, UK equities also traded in line with the rest of Europe, with the FTSE 100 (+0.58%) and the more domestically-focused FTSE 250 (+0.28%) both rising."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)