Daily summary: Wall Street rebounds at the end of the week, US30 surges 1.2%🗽Bitcoin gains 4%

• U.S. indices are experiencing their first major rebound after a series of declines. Leading the recovery is the Nasdaq, up +2.3%, followed by the Russell 2000 (+2.05%), S&P 500 (+1.66%), and Dow Jones Industrial Average (+1.5%). The VIX volatility index continues its decline following the latest contract rollover.
• AI-related stocks are driving the rally, with Palantir, AppLovin, and semiconductor stocks seeing strong gains. Nvidia leads the Magnificent Seven (Mag7) with a +4% surge, pushing above $120 per share.
• Market sentiment in the U.S. improved after the Senate Majority Leader withdrew his earlier statement about blocking the federal spending bill, reducing the risk of a government shutdown.
• The US UoM report came in much worse than expected, highlighting a surge in inflation expectations (both short and long term), while US consumers expectations fell deeply to 54.2 vs 63 exp. and 64 previously.

University Michigan Sentiment Prelim: 57.9 (Forecast 63, Previous 64.7)

University Michigan Condition Prelim: 63.5 (Forecast 64.4, Previous 65.7)

University Michigan Expectations Prelim: 54.2 (Forecast 63, Previous 64.0)

University Michigan 5 Yr Inflation Prelim: 3.9% (Forecast 3.4%, Previous 3.5%)

University Michigan 1 Yr Inflation Prelim: 4.9% (Forecast 4.3%, Previous 4.3%)

• European indices closed higher, led by the German DAX (+1.86%), buoyed by an agreement between Merz’s coalition and the Greens on funding government expenditures. Other major indices followed CAC40 (France) +1.13%, FTSE 100 (UK) +1.05%, FTSE MIB (Italy) +1.73%, IBEX 35 (Spain) +1.43% and SMI (Switzerland) +0.63%
• The CDU/CSU-SPD-Green coalition announced an agreement to ease Germany’s fiscal brake policy, paving the way for a €500 billion fund. The Greens agreed not to block the bill, provided it includes funding for infrastructure, defense, and energy transformation.
• The U.S. dollar (USDIDX) declines 0.08% against a basket of major currencies to close the week lower. The strongest performers against the dollar include AUD/USD (+0.65%), NZD/USD (+0.88%) and USD/CAD (-0.5%) – the Canadian dollar recovers almost all of yesterday’s losses.
• Meanwhile, the Japanese yen weakens (USD/JPY +0.5%) as markets anticipate the Bank of Japan will maintain its current interest rate levels. The euro extends its gains (+0.22%) against the dollar, despite tariff threats and Donald Trump's renewed criticism of the European Union.
• Vladimir Putin offered a cautiously optimistic assessment of ongoing peace talks with Donald Trump, while also stating that he expects Ukrainian forces to surrender in Kursk. Ukrainian President Volodymyr Zelensky emphasized the need for stronger air defense as part of any peace deal.
• JP Morgan cut its 2025 U.S. GDP growth forecast to 1.6% from 1.9% previously. Despite the downgrade, U.S. Treasury yields are rising; 10-year treasury yields up 3 basis points; 2-year treasury yields up 6 basis points, exceeding 4%
• Oil remains flat, while natural gas futures rise +2%. Cocoa (-4%), coffee (-3%), and corn (-1.7%) lead the losses in agricultural commodities. 
• ICE cocoa inventories at U.S. port warehouses have hit a nearly 4-month high. The International Cocoa Organization (ICCO) increased its projected market surplus, forecasting the first global oversupply in four years, with cocoa production expected to rise by a record 8% YoY despite uncertain crop yields in Ivory Coast.
• Gold retreats slightly after surpassing the $3,000 mark. Bitcoin jumps +4% to $84,500. The Trump token surges +12%, while Chainlink and Solana gain nearly 10%.
• Quantum computing stocks surge despite short-seller attack. Despite a short position announcement by Kerrisdale Capital, which targeted quantum computing firm IONQ, the stock rebounded +14% today. Similarly, Rigetti Computing surged +18%, reflecting continued bullish momentum in the sector.