Market Commentary

US markets were closed on Friday in observance of the Juneteenth National Independence Day holiday, with trading on the New York Stock Exchange, Nasdaq and US Treasury markets suspended. Attention remained on the Federal Reserve’s (Fed) latest policy decision and the US dollar, which traded around 100.8, near one-year highs, as prospects of higher interest rates supported the currency. Around half of Federal Open Market Committee (FOMC) members now project at least one rate hike in 2026, while markets are pricing in roughly a 50% probability of a 25-basis-point increase in September. Geopolitical concerns also resurfaced after scheduled US-Iran talks in Geneva were cancelled and reports suggested thinner traffic through the Strait of Hormuz. The dollar gained about 1.10% over the week.

European equities eased from record levels as renewed uncertainty surrounding US-Iran negotiations tempered sentiment. The Euro STOXX 50 slipped 0.30% to 6 302 and the STOXX Europe 600 fell 0.20% to 636, although both indices remained higher on the week, gaining 1.90% and 0.40%, respectively. Luxury and technology shares led declines, with LVMH, Hermes and Ferrari falling between 2.30% and 2.50%, while ASML and Prosus lost 1% and 2.20%, respectively. Industrial shares outperformed, while some banks extended gains.

The FTSE 100 declined 0.40% and finished the week down more than 1%. Mining stocks were among the largest drags, with Rio Tinto, Glencore, Anglo American and Antofagasta all ending lower. Precious metal miners also weakened, while Shell and BP gained around 1% and 2%, respectively, as oil prices remained volatile. UK retail sales rose 1.20% in May, exceeding expectations, while public sector borrowing increased to £23.3 billion.

Asian markets were mixed. The offshore yuan weakened to around 6.79 per dollar, its lowest level in a month, amid a stronger US dollar and growing expectations of higher US interest rates. Japan’s Nikkei 225 gained 0.28% to 71 250, while the Topix fell 0.57%. The Bank of Japan reiterated that it would continue raising interest rates gradually while monitoring upside risks to inflation.

South African markets ended sharply lower, with losses concentrated in resource shares. The FTSE/JSE All Share Index fell 2.08% to 112 610.79 and the Top 40 declined 2.52% to 104 258.73. The Resource 10 tumbled 8.37% and the Metals & Mining Index plunged 10.11%, while financials and property shares provided some support. The rand weakened 0.13% against the US dollar to R16.47/$ but remained firmer against the pound and euro.

Commodities were mixed. Brent crude traded near $80 per barrel and headed for a weekly decline of roughly 8% despite renewed uncertainty surrounding US-Iran negotiations and shipping activity through the Strait of Hormuz. Gold fell to around $4 150 per ounce, its lowest level since 11 June, while silver dropped below $65 per ounce and platinum retreated towards six-month lows as a stronger US dollar and expectations of tighter monetary policy weighed on precious metals.