Markets Wrap July 10: Stocks Gain, Yen Steadies, CAD Fades
US equities climbed on chip and AI optimism while the yen rebounded modestly and Canada's jobs beat failed to sustain loonie gains.
Wall Street closed the week on a constructive note, with the S&P 500 rising 0.4% and the Nasdaq gaining 0.3%, driven by enthusiasm around artificial intelligence infrastructure. SK Hynix's US market debut drew fresh attention to chip demand dynamics after the company signaled that demand would peak in 2027 but remain elevated through 2030. Meta amplified the AI theme, surging 6% following the release of a new model and upbeat remarks from CEO Mark Zuckerberg about the economics of its data center buildout — a signal that hyperscaler spending appetites remain intact.
The Federal Reserve's semi-annual report to Congress flagged a notable uptick in inflation during the spring, a reminder that the disinflation narrative is not yet resolved. US 10-year Treasury yields edged up 2 basis points to 4.56%, reflecting ongoing caution about the rate path even as equities pushed higher. The divergence between small-cap performance — the Russell 2000 fell 0.5% — and large-cap indices underscores how narrowly concentrated the current rally remains, a structural vulnerability worth monitoring.
Read more Adobe Stock Jumps 5.6% But Trades Far Below Estimated Fair Value →
In currency markets, the Canadian dollar briefly strengthened after June employment came in at a solid +18,200 jobs against expectations of +10,000. But the initial move proved fleeting: USD/CAD dipped to 1.4120 before reversing back toward 1.4157 as broad dollar demand reasserted itself, illustrating how macro data surprises continue to be overshadowed by directional USD flows. Deutsche Bank noted this week that a single dominant theme has driven foreign exchange markets throughout 2025, a dynamic that leaves most crosses hostage to one variable.
The Japanese yen was the session's FX standout, with USD/JPY dropping 65 pips and briefly falling more than a full cent, amid growing signals that Japanese authorities are prepared to defend more aggressively against further yen weakness. Still, the pair found solid buying interest on two separate tests of the 161.25 level, suggesting the battle is far from settled. Meanwhile, crude oil slipped modestly to $71.57 a barrel amid conflicting Iran-related headlines, though weekend talks between US, Iranian, and mediating parties offered a potential diplomatic pathway. Gold managed to pare most of its intraday losses, finishing down just $9 despite a firm dollar — a quiet form of resilience.
Continue reading at Forexlive.
