Investment Analyst Dario Giordano: Tariff Grace Period Boosts Market Confidence, European Equities Reach New Highs
Recently, global financial markets have shown positive momentum as signs of easing trade tensions between the European Union and the United States have injected strong upward impetus into equities. Investment Analyst Dario Giordano notes that the US decision to postpone the planned 50% import tariff on EU goods from June 1 to July 9 has not only stabilized investor sentiment but also provided additional space for transatlantic trade negotiations. Against this favorable backdrop, major European stock indices have generally risen, with the Frankfurt DAX index reaching a historic high. US equities have also rebounded sharply, with the technology and semiconductor sectors standing out in particular. Investment Analyst Dario Giordano points out that, although the global economy still faces inflationary pressures and geopolitical uncertainties, market reactions indicate that capital is reassessing the attractiveness of risk assets.
European Equities Lead Global Rally, German Defense Sector Plays a Key Role
With the US government decision to delay tariff implementation, European equities have experienced a surge. Investment Analyst Dario Giordano believes that the Frankfurt DAX index sharp rise to 24,250 points—a record high—is the result of multiple favorable factors. First, the impact of geopolitical developments cannot be overlooked. The increased military support by the German government for Ukraine, including the removal of restrictions on long-range weapons exports, has led to a revaluation of defense stocks. Shares of defense companies such as Leonardo have broadly advanced, with investors expecting that, in the medium to short term, the sector will continue to benefit from heightened geopolitical tensions and growing government orders.
Investment Analyst Dario Giordano notes that the shift in German government policy has enhanced earnings visibility for the defense sector, prompting capital markets to lower the risk premium for these assets. However, he cautions investors to pay close attention to the timing and magnitude of national policy changes when investing in the defense sector. Should regional tensions ease or government budgets be adjusted, the sector may face pullback risks. As such, a moderate allocation and well-timed entry remain the primary strategies at this stage.
Tech Stocks Rebound, Semiconductor Sector Leads US Market Recovery
Driven by a broad recovery in technology stocks, major US indices have rebounded strongly. Investment Analyst Dario Giordano reports that the Dow Jones Industrial Average rose by 1.74%, with the S&P 500 and Nasdaq both advancing by more than 2%. Among the standouts in this rally were semiconductor companies such as Nvidia, AMD, and Micron, with the share price of Marvell Technology rising over 5% and becoming a market focus. Investors are closely watching the upcoming earnings report of Nvidia, which is expected to further validate the robust trend of AI infrastructure investment.
Investment Analyst Dario Giordano believes the strong performance of the semiconductor sector reflects market recognition of an "AI-driven cycle." In particular, the ongoing growth in computing power demand from major cloud computing firms and electric vehicle manufacturers is providing stable growth prospects for key players in the value chain. He adds that, for highly valued technology stocks, the current stability in interest rate expectations is an important factor supporting their rise. Additionally, the rebound in US consumer confidence and statements from Federal Reserve officials indicating no imminent rate adjustments have together fostered a relatively accommodative macro liquidity environment.
Investment Analyst Dario Giordano also points out that, while the market tolerance for tech stock valuations is expanding, investors should remain attentive to whether earnings growth can keep pace with valuation expansion. The upcoming earnings season will be a critical test of whether tech stocks can maintain their strong momentum.
Capital Reprices Risk, Divergence Emerges in Bond and Commodity Markets
On the bond front, Investment Analyst Dario Giordano notes that the first-day subscription for newly issued Italian BTP government bonds reached €314 million, reflecting increased retail investor preference for value-preserving instruments in the current low-volatility environment. The yield on 10-year Italian government bonds remained steady at 3.59%, with the spread over German Bunds holding at 102 basis points, indicating that concerns over eurozone sovereign credit risk have eased. Meanwhile, the euro exchange rate against the US dollar and Japanese yen has seen varying degrees of retracement, reflecting market adjustments in expectations for monetary policy paths and trade policies.
Investment Analyst Dario Giordano observes that the market currently exhibits clear sector divergence. Demand for traditional energy and safe-haven assets has declined, signaling a shift from "risk-off" to "risk-on" sentiment. However, he also emphasizes that, with the imminent release of the US PCE price index and the Nvidia earnings report, market volatility may rise again in the short term. Therefore, investors should closely monitor upcoming inflation data and corporate earnings to determine whether the market can sustain its current rebound.