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Cooling inflation boosted global stock markets, with funds flowing into growth sectors at an accelerated pace.
Stock Science8 months before
Summary：In July 2025, with the latest inflation data from the United States and Europe coming in below expectations, global stock markets rebounded sharply, with growth sectors like technology, healthcare, and green energy becoming new favorites. Experts caution that despite this optimism, investors should still monitor monetary policy and macroeconomic risks, and rationally allocate their asset structures.
Contributor
Evelyn Carter, Senior Financial Correspondent
On July 10, 2025, major global stock indices rallied amidst a sharp decline in inflation data released by the United States and Europe. The S&P 500 and Nasdaq both hit new all-time highs, while the UK's FTSE 100 and the Euro Stoxx 50 also recorded their strongest monthly gains since 2023.
Positive inflation data boosts market confidence
The latest US CPI report showed that the annual inflation rate fell to 2.2% in June, below analysts' expectations. Eurozone inflation fell to 2.0% in June, reaching the ECB's target for the first time in nearly three years. This boosted market risk appetite, led to lower US Treasury yields, and continued strength in global stock markets.
Funds are accelerating their layout in growth sectors
Amid cooling inflation, investors are shifting out of defensive sectors like consumer staples and utilities and into high-growth sectors. The technology sector has outperformed, with leading AI and semiconductor companies reporting strong results. Healthcare and new energy also attracted significant inflows, reflecting investors' expectations for long-term growth and favorable policies.
The central bank expressed caution, but market uncertainty remains
Despite buoyant market sentiment, Federal Reserve Chairman Powell emphasized the need for more evidence to support a rate cut. The European Central Bank also reiterated its data-driven approach, stating that future monetary policy may adjust based on economic data. The market should monitor future interest rate trends and policy changes.
Risks and prospects coexist
Some analysts caution that supply chain disruptions, geopolitical risks, and monetary policy fluctuations remain uncertainties affecting the market. "While the data is positive, the global recovery is not yet solid," said Rachel Lin, a strategist at Morgan Stanley. "Investors are advised to maintain diversified portfolios to mitigate volatility risks."
Outlook: Emphasis on structural opportunities and risk management
Looking ahead, experts predict that global stock markets are poised for a new round of steady expansion amid controlled inflation and a moderate economic recovery. However, investors are advised to focus on sector rotation and risk management, seize structural opportunities, and avoid short-term volatility.
Evelyn Carter concluded: "The decline in inflation is positive for risk assets, but in an uncertain market environment, investment still needs to be both optimistic and cautious."
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