Equity Market Losses and Dollar Trims This Week’s Gains
June 26, 2026
Tech stocks were spooked today by further evidence that AI development is costing as well as reports that OpenAI’s IPO may be delayed until next year. In futures trading, All four major U.S. equity indices are off, led by a 1.2% drop in the Nasdaq. Asian stock markets plunged 4.2% in Japan, 3.8% in South Korea, 3.6% in Taiwan, 2.3% in China and 1.7% in Indonesia. Stock market losses in Europe so far range from 0.4% in Spain to 1.2% in both Germany and Italy.
It had been a good week for the dollar, which came very close to a four-decade high against the yen, but today has seen profit-taking with overnight declines of 0.3% against the euro, 0.2% versus the Swiss franc and 0.1% relative to the yen, loonie, kiwi and Australian dollar. Larger drops occurred of 0.6% vis-a-vis the rupiah and 0.5% against the won.
Oil’s price continues to fall. West Texas Intermediate crude slumped another 3.0%, breaking below $70 to its softest level since the onset of the Iran war, and traffic through the Strait of Hormuz is back to about three-quarters the normal level. Both developments defy predictions by many pundits that it probably would take many months for a return of conditions in that region to anything resembling normal.
Bitcoin performed poorly during the war and slid below $60,000 today. Gold is holding slightly above $4000 but is over 25% below its record high of $5,626.8 per ounce touched early this year.
Ten-year sovereign debt yields have retreated today by three basis points in Japan and a basis point in the U.S., Germany, France, Italy and Australia.
Consumer price inflation in Tokyo, a leading indicator of the national trend, rose in June to a 6-month overall high of 1.7%, a 3-month high excluding food of 1.6%, and a 2-month high of 1.9% excluding both food and energy. The month-on-month rises of the seasonally adjusted data series ranged from 0.3% to 0.4%.
Icelandic consumer price inflation of 5.2% in June exceeded 5.0% for a fourth straight month.
Swedish producer price inflation accelerated to 6.6% in May from 4.7% in April, 2.0% in March and -2.7% last December.
Austria’s purchasing managers index in a survey of manufacturers dropped o.8 index points to a 4-month low of 50.9 in June. The bulk of manufacturing PMI surveys around the world for this month will be released next Wednesday.
Italian business confidence among manufacturers rose to a 3-month high in June, but consumer sentiment softened to a 2-month low.
Business confidence and consumer sentiment in Sweden improved to 3-month highs in June.
China’s current account surplus in the first quarter has been revised marginally above the initial estimate to $184.3 billion. Although less than the surpluses in the previous two quarters, the surplus was 12.4% wider than a year earlier.
Today’s scheduled early estimate of the U.S. traded goods deficit in May proved to be an outlier. At $105.8 billion, such was 27.5% greater than April’s deficit and the widest since March 2025. During the subsequent 13 months, the deficit had averaged $79.0 billion per month and been as narrow as $61.4 billion last October. Analysts had not anticipated last month’s spike in which exports slumped by 5.4% after rising 3.8% in April and imports climbed 3.6% after a monthly rise of 2.0% in the previous month. Compared to May 2025, growth in exports (14.7%) was similar to that of imports (15.0%) in spite of America’s highly protective tariff policy.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Tokyo CPI, U.S. trade deficit
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