A sector rotation took centre stage within the US inventory market on Tuesday, 1 July, as traders pulled out of mega-cap know-how shares. The slid -0.90%, underperforming considerably, whereas the rose 0.9% for its fourth consecutive achieve, closing at 44,495—simply 1% shy of its all-time intraday excessive of 45,074 from December 2024.
US Senate Vote Pressures Tech Giants
The sell-off in tech was triggered by the Senate’s approval of President Trump’s US$3.3 trillion tax and spending lower bundle. The laws included the rejection of a proposal that might have restricted particular person US states from regulating synthetic intelligence, delivering a blow to tech giants equivalent to Microsoft (NASDAQ:), Meta Platforms (NASDAQ:), and Nvidia (NASDAQ:).
Fed and BoJ Maintain Cautious Coverage Stance
Talking on the ECB Discussion board on Central Banking, Fed Chair Jerome Powell maintained his cautious “wait and see” stance on , drawing additional criticism from President Trump. Equally, BoJ Governor Kazuo Ueda reiterated that the central financial institution will watch for extra knowledge, notably round inflation and tariff impacts, earlier than tightening additional.
Whereas the left its coverage fee unchanged at 0.5% in June (a 16-year excessive), markets nonetheless anticipate yet one more 25-basis-point hike in This fall.
US Greenback Weakens Additional, However Tempo Slows
The prolonged its dropping streak to seven classes on Tuesday, although at a slower tempo, with the down -0.1%. In at this time’s Asia session, the buck is buying and selling flat general, registering minor features towards the (+0.08%) and (+0.14%), whereas holding regular towards the and .
Asia Equities Blended; Nikkei Lags on Tariff Fears
Asia Pacific markets opened blended. Japan’s underperformed with an intraday drop of -0.12%, following an early dip of -1% that examined the 39,390 help stage. The slide got here after President Trump threatened to lift tariffs on Japanese exports to 30%-35%, up from a proposed 24%, as commerce negotiations falter forward of the 9 July reciprocal tariff deadline.
In the meantime, Hong Kong’s reopened from a public vacation with a 0.6% intraday achieve, and Singapore’s prolonged its rally by 0.5%, setting a brand new all-time intraday excessive of 4,010.
Gold Holds Features Above Help Forward of US Jobs Knowledge
Gold () continues to consolidate close to US$3,340, supported by its 50-day transferring common at US$3,318. After a two-day rally that delivered a 2.9% achieve, momentum has paused close to the 20-day transferring common resistance at US$3,360. Merchants at the moment are awaiting the US ADP Employment Change report for cues on the following directional transfer.
Financial Knowledge Releases
Fig 1: Key knowledge for at this time’s Asia mid-session (Supply: MarketPulse)
Chart of the Day – Nikkei 225 Bounces From Help, Bullish Pattern Stays Intact
Fig 2: Japan 225 CFD Index minor pattern as of two July 2025 (Supply: TradingView)
The latest minor corrective decline of -3.4% seen on the Japan 225 CFD Index (a proxy of the ) from its 30 June 2025 intraday excessive of 40,852 to 2 July 2025 intraday low of 39,527 has stalled at an intermediate key help inflection space.
Firstly, the decrease boundary of a minor ascending channel has been in play for the reason that final Monday, 23 June low. Secondly, the 50% Fibonacci retracement of the prior steep bullish breakout rally from 23 June 2025 low to 30 June 2025 excessive. Thirdly, the minor corrective decline of -3.4% could mark the tip of a minor corrective wave 4 sequence, and the following doable transfer on the Japan 225 CFD Index may even see the beginning of a minor bullish impulsive wave 5 sequence primarily based on the Elliot Wave Precept (see Fig 2).
As well as, the hourly RSI momentum indicator has traced out a bullish divergence situation yesterday at its oversold area and staged a bullish breakout above a parallel descending resistance. These observations counsel yesterday’s draw back momentum has eased.
Watch the 39,390 key short-term pivotal help for the following intermediate resistances to return in at 40,4040, 40,335, and 40,850/41,050 in step one.
On the flip aspect, a break under 39,390 negates the bullish tone for an extension of the minor corrective decline to reveal the following speedy helps at 39,145 and 38,850 (pull-back of the previous vary resistance from 13 Might 2025 and near the 20-day transferring common).
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