Apple Soars, US CPI and Fed Rate Decision Loom

Equities

On Tuesday, London's FTSE 100 index declined by 1%, marking its worst performance in nearly two months, primarily impacted by a downturn in financial stocks and industrial miners. The FTSE 250 also experienced a decrease, slipping 0.9% to its lowest point in over a month. Specific losses were noted in non-life insurers, which fell by 2.7%, and banks, which dropped by 2.3%. The unemployment rate in the UK rose to 4.4% in April, up from 4.3%, with wage growth remaining steady, suggesting that the Bank of England might not cut interest rates in the near future.

Notable movements in the UK companies included a significant rise in Raspberry Pi shares, which soared more than 37.5% on its trading debut. Oxford Instruments also saw an impressive increase, jumping 7.1% after reporting full-year results that exceeded expectations. On the other hand, Rio Tinto's shares declined by 2.0% following the announcement of its purchase of Mitsubishi Corp's 11.65% stake in Boyne Smelters.

Shifting focus to the US, the S&P 500 and Nasdaq achieved record closing highs, driven largely by a remarkable 7.3% jump in Apple shares, which reached a new record high. This surge came after Apple introduced new artificial intelligence features at its annual developer event, enhancing the capabilities of its devices, including an improved Siri virtual assistant. The S&P 500 technology index also climbed 1.7%, achieving a record closing high.

General Motors (GM) saw a 1.35% increase after announcing a $6 billion share buyback plan, although it also cut its annual EV production forecast. Following the closing bell, Oracle's shares rose 8% post the release of their quarterly results, despite a slight decline during the regular session.

Forex & Commodities

The US dollar held steady after reaching a four-week high, as market players anticipated upcoming US inflation data and the Federal Reserve's economic projections. Following a robust jobs report last Friday, expectations of a US rate cut have diminished, with markets now seeing a roughly 56% chance of a cut in September, down from last week's 77.8%. The dollar index touched 105.46, its highest since mid-May, before stabilising at 105.29. The euro and the British pound remained relatively unchanged against the dollar, with the pound trading flat at $1.2739 ahead of the UK's April GDP figures.

In Asia, the Japanese yen was under pressure, maintaining levels around 157.235 to the dollar, influenced by Japan’s wholesale inflation, which saw a sharp increase. This has set the stage for the Bank of Japan's policy meeting, where it is expected to maintain its interest rate policy while providing insights on its balance sheet reduction plans.

Gold prices in Asia have surged despite nearing record highs, with spot gold trading just over $2,300 per ounce. Notably, gold purchases in China jumped 27% in the first quarter of the year.

Oil prices saw an uptick, with Brent crude advancing 50 cents to $82.42 a barrel and West Texas Intermediate (WTI) increasing 62 cents to $78.52. This rise follows a positive adjustment in global demand forecasts by the US Energy Information Administration and OPEC.