Bond Market Blues Spoil Equities Party

Author: Jamie McGeever, Markets Columnist
Published: Tuesday, July 15, 2025, 23:03 GMT+2

Introduction

The S&P 500 and Nasdaq hit fresh record highs on Tuesday, driven by a surge in Nvidia shares, but closed mixed as investors digested higher U.S. inflation, a wave of big-bank earnings, and rising global bond yields—particularly in Japan.

Commentary

In today’s column, I ask whether there’s a creeping sense of pricing complacency developing in markets as investors increasingly bet on the “TACO trade.”

If you have time to read more, here are some recommended articles to help you understand what moved markets today:

For Europe, 30% U.S. tariffs would hit trade and force a rethink of the export model.

Trump’s fresh attack on the Fed simmers over markets (Mike Dolan).

Investors seek protection from the risk of the Fed Chair’s ouster.

Fed’s inflation fears materialize as June CPI rises.

What the rest of the world can learn from “Swiss exceptionalism” (Jen).

Key Market Moves Today

Nasdaq gained 0.2%, but other major U.S. indexes fell. The Russell 2000 small-cap index lost 1.7%. Technology was the only sector in the S&P 500 to advance.

Nvidia stock jumped 4% to a new record above $172, pushing its market capitalization beyond $4 trillion.

The UK’s FTSE 100 broke 9,000 points for the first time ever but closed down 0.6%, marking its biggest drop since unrest following Liberation Day in early April.

Japanese government bond yields climbed to new highs: the 10-year yield hit 1.595%, its highest since 2008, while 20- and 30-year yields set record highs at 2.65% and 3.20% respectively.

The U.S. Dollar Index (DXY) rose for a seventh consecutive session, its longest winning streak since last October.

Bond Market Blues Spoil the Equities Party

Global markets delivered mixed performances on Tuesday.

Two of Wall Street’s three major indexes, the UK’s FTSE 100, and the MSCI World Index all hit new highs at some point during the day. But U.S. inflation accelerated, bond yields rose, and investors shrugged off what appeared to be solid earnings from major U.S. banks.

Equity strength was primarily driven by the technology sector, after AI chipmaker Nvidia overnight announced plans to resume sales of its H2O AI chips to China. Hong Kong’s tech index kicked off the session with a 2.8% rally, and tech was the only S&P 500 sector to close in positive territory.

Yet if the market’s glass was half full in the morning, it was half empty by the close.

U.S. inflation data broadly met expectations, but investors focused on upside risks.

Big U.S. bank earnings were strong, but financial stocks were among the worst performers.

Conclusion

Markets remain torn between optimism over technology-driven growth and persistent concerns about inflation, interest rates, and bond yields. The strong performance of tech stocks, led by Nvidia, highlights investors’ appetite for AI-linked growth themes, even as higher yields threaten to undermine broader market momentum.