Global Markets Q2 Recap: AI, Dollar, Oil

Global markets concluded the second quarter with significant shifts driven by several key factors. The MSCI All-Country World Index saw its best second-quarter performance since 2020, with a nearly 14% rise, largely fueled by a boom in artificial intelligence stocks, particularly in Asian markets like South Korea's KOSPI (up 68%) and Taiwan's benchmark (up 45%), and the Nasdaq-100 (up 20%). Europe's STOXX Europe 600 also posted a strong 10% quarterly gain. The United States dollar emerged as a standout winner, gaining 1.4% against major currencies, as expectations for United States — Federal Reserve interest rates shifted dramatically from cuts to hikes due to the surprising strength of the United States economy and persistent inflation. This dollar strength contributed to Gold's largest quarterly fall in over a decade (14%) and pushed the Japan — Japanese yen to a 40-year low against the dollar, prompting warnings from Japan's Finance Minister Satsuki Katayama about potential intervention. In energy markets, Brent Crude prices fell almost 40% for the quarter, its largest drop since 2020, as hostilities between the United States and Iran receded into a fragile ceasefire, leading to the gradual reopening of the Strait of Hormuz and increased supply. New United States — Federal Reserve Chair Kevin Warsh is expected to address these developments at the European Union — European Central Bank's annual meeting.