Market Commentary

US stocks declined after the Federal Reserve (Fed) left interest rates unchanged on Wednesday after its fourth straight meeting in June 2026, which was the first under Chair Kevin Warsh. The dollar index climbed above 100.3, its highest level since March, as markets digested the latest FOMC decision. The Fed raised its 2026 Personal Consumption Expenditures (PCE) inflation projection to 3.60% from 2.70% in March, with core PCE now expected to reach 3.30%, up from 2.70%.

The S&P 500 fell 1.20%, the Nasdaq 100 dropped 1% and the Dow lost 507 points from its record high. The Magnificent Seven led declines amid a sell-off in Treasuries – Meta dropped 4.20%, Microsoft off 3.60%, Alphabet was down 2.40%, and Amazon fell 3.10%. Chipmakers extended their rally, with Micron up 2.20%, Marvell gaining 3.90% and Intel advancing 3.50%.

European equities extended gains for a fifth consecutive session and reached fresh record highs as lower energy prices reduced inflation concerns. The Euro STOXX 50 rose 0.60% to 6 297 and the STOXX Europe 600 gained 0.50% to 639. Banks led gains, with Santander, UniCredit and Deutsche Bank advancing about 2.50%, supported by an improved credit outlook and lower sovereign yields. In contrast, BMW fell more than 6% after lowering its guidance.

The FTSE 100 edged modestly higher as investors assessed inflation data and looked ahead to the Bank of England’s (BoE) policy decision. HSBC gained about 1.50%, while AstraZeneca and GSK advanced 1.30% and 1.10%, respectively. Energy shares remained under pressure, with Shell and BP both declining more than 1%.

Asian markets were firmer. The Shanghai Composite rose 0.40%, while the Shenzhen Component gained 1.31%, led by technology shares following policy announcements at the Lujiazui Forum. Japan’s Nikkei 225 rose 0.72% to a fresh record high as stronger-than-expected trade data and the Bank of Japan’s recent interest rate increase supported sentiment.

South Africa’s annual inflation rate rose for the third consecutive month to 4.50% in May 2026, marking the highest rise since July 2024. Retail sales climbed 1.30% year‑on‑year in April, after a downwardly revised 2.50% increase in March.

Markets ended higher: the FTSE/JSE All Share gained 0.41% to 116 024.72 and the Top 40 added 0.46%. Financials and resources led the advance, as the Financial 15 rose 1.37%, the Resource 10 gained 1.03% and the Metals and Mining index was up 1.27%, while the Industrial 25 fell 0.97%, tempering broader gains. The rand strengthened slightly against the US dollar, closing at R16.17.

Commodities were mixed as Brent crude slipped below $75 a barrel, extending its decline, while gold recovered from earlier losses to trade above $4 300 an ounce after US President Donald Trump signed an interim agreement to end the conflict with Iran and reopen the Strait of Hormuz. Silver eased to below $70 an ounce following the Fed’s inflation-rate decision.