Q3 Begins: Euro Climbs Above $1.18, Nasdaq Hits Record

The euro rose for a tenth straight session, hitting $1.1800 against the US dollar—its highest level since September 2021—as markets await remarks from ECB President Christine Lagarde and other central bankers at the Sintra forum. European equity futures were flat to slightly higher. Asian equities were mixed; Japan’s Nikkei slipped, but South Korea and Taiwan markets gained over 1.4% following new data from Japan’s Tankan survey and China’s Caixin PMI.

Equities

The FTSE 100 fell 0.4% on Monday, ending the month slightly lower but holding on to gains of more than 7% so far this year. While the blue-chip index was weighed down by fading momentum from earlier trade optimism, the mid-cap FTSE 250 also dropped 0.4% on the day but ended the quarter up over 11%—its strongest quarterly rise in nearly five years.

Among individual UK stocks, WH Smith dropped 3.4% after announcing it would receive less than previously expected from the sale of its UK high street business to Modella Capital, the owner of Hobbycraft. GSK shares slipped 1.1% following news that a US senator is launching an investigation into the company’s decision to discontinue an asthma inhaler widely used by children.

Centrica fell 1.2% after J.P. Morgan downgraded the stock. Meanwhile, Rolls-Royce rose 1.4% after the new US-UK trade deal came into effect, removing the 10% tariff on aircraft engines and components, providing a lift to the aerospace and defence sector, which rose 1.2% overall.

In the US, the S&P 500 climbed 0.52% to close at a record 6,204.95, while the Nasdaq added 0.48% to also reach an all-time high of 20,369.73. The Dow Jones rose 0.63% to 44,094.77.

Over the second quarter, the Nasdaq surged 17.75%, the S&P 500 gained 10.57%, and the Dow rose 4.98%. The rally was led by heavyweight tech and energy stocks, and portfolio adjustments towards the quarter’s end helped support index levels.

Hewlett Packard Enterprise led the S&P 500 with an 11.1% jump. The move followed stronger-than-expected earnings and raised guidance, as demand for enterprise AI and cloud services continues to grow. First Solar rose 8.8% on news of increased US government support for clean energy manufacturing. Juniper Networks gained 8.45%, supported by takeover speculation following recent industry consolidation trends.

Forex & Commodities

The US dollar slipped to a near four-year low against the euro on Monday, with the dollar index falling 0.35% to 96.86, marking its sixth consecutive monthly loss and heading for its worst half-year since the early 1970s. The euro strengthened 0.45% to $1.1780, its highest level against the dollar since September 2021, and is up around 14% so far this year. The Swiss franc also gained ground, rising 0.63% on the day and 12.5% year-to-date. The dollar was flat against the yen over the month but edged down 0.36% on Monday to 144.45. Sterling gained 0.04% to $1.3719, with a 2% rise in June.

The Canadian dollar firmed 0.41% to C$1.353 per US dollar after Ottawa cancelled a planned digital services tax just hours before implementation, a move seen as aimed at smoothing US trade negotiations. This marked the loonie’s fifth straight monthly gain.

Gold climbed 0.6% to $3,322.55 per ounce in spot markets. A weaker dollar helped lift gold, while tariff uncertainty ahead of President Trump’s 9 July deadline added to demand. Spot silver rose 0.2% to $36.16, platinum held at $1,352.49, and palladium gained 1.4% to $1,113.18.

Oil traders expect Saudi Aramco to raise its August official selling price for Arab Light crude by up to 80 cents, which would place it at a four-month high. Price hikes are also forecast for other Saudi grades. A recent spike in spot prices during the Iran-Israel conflict and strong Asian demand are pushing prices higher. OPEC+ is expected to confirm a production increase of 411,000 barrels per day at its next meeting on 6 July.