Market Commentary

US equities delivered a mixed performance on Thursday as renewed concerns about the sustainability of AI-driven growth weighed on technology shares, while easing Treasury yields and lower oil prices provided support elsewhere. The S&P 500 fell 0.50% and the Nasdaq 100 declined 1%, with Broadcom dropping 15% despite beating earnings expectations after its AI revenue outlook disappointed investors. CrowdStrike also fell more than 10% following its results. In contrast, defensive shares supported the Dow Jones Industrial Average, which gained more than 1%, with Procter & Gamble and Johnson & Johnson both rising 2%.

The yield on the US 10-year Treasury note eased to 4.46%, reversing most of the previous session’s increase as oil prices retreated on hopes of a broader Middle East de-escalation. Investors also assessed labour market data ahead of Friday’s nonfarm payrolls report, while expectations for a Federal Reserve rate hike later this year remained intact.

European equities moved higher as lower energy prices eased inflation concerns. The Euro STOXX 50 gained 0.80% and the STOXX Europe 600 rose 0.50%. Banks led the advance, with Santander, Deutsche Bank and UniCredit gaining between 1.50% and 3%, while Airbus climbed 4.60%. The euro strengthened towards $1.164 as markets priced in a near-certain 25 basis point European Central Bank rate hike next week.

The FTSE 100 edged marginally higher but underperformed broader European markets. Lower oil prices weighed on Shell and BP, while Prudential, Standard Chartered and HSBC declined following reports that some banks had suspended the opening of Hong Kong accounts for mainland Chinese clients. The Sterling strengthened towards $1.35 amid improving risk sentiment.

Asian markets were weaker. Chinese equities snapped a two-session winning streak as investors weighed the impact of proposed US tariffs and potential European restrictions on Chinese firms. The Shanghai Composite fell 0.64% and the Shenzhen Component lost 0.27%. Japan’s Nikkei 225 declined 1.36%, retreating from record highs as weakness in global technology shares weighed on sentiment.

Locally, the FTSE/JSE All Share Index fell 0.47% as losses among resource and industrial shares offset gains in financial stocks. The rand strengthened modestly, with the US dollar easing to R16.29.

Commodity markets reflected improving optimism surrounding the Middle East. Brent crude fell more than 3% ending the day on $95 a barrel, while WTI declined to approximately $92. Gold rose above $4 500 per ounce before dropping slightly, silver steadied at $73 and platinum remained near $1 890.