Market Commentary

Brent crude fell below $74 per barrel on Wednesday, touching its lowest level since late February 2026 as concerns over potential supply disruptions continued to ease. Market sentiment was supported by growing confidence in the security of shipping routes through the Strait of Hormuz, with tanker traffic increasing as vessel operators resumed normal transit through the strategically important waterway. Progress in diplomatic discussions between the US and Iran further alleviated concerns about potential supply interruptions.

The softer supply-risk tone outweighed supportive US inventory data from the Energy Information Administration, which showed crude stocks falling to their lowest level since 1984. Stocks at the Cushing oil hub also declined to levels approaching operational minimums.

Precious metals came under pressure as risk appetite improved: gold lost 2.55%, silver slid 5.97%, and platinum dropped 5.12%, reflecting a move away from traditional safe havens.

US equities rebounded after two sessions of losses, with the S&P 500 and Nasdaq 100 each gaining 0.98% and the Dow Jones Industrial Average rising 403 points to a fresh record high. Technology names stabilised after a sharp prior sell-off over concerns that artificial intelligence (AI) infrastructure spending may be peaking. Semiconductors recovered some ground: Nvidia, Intel and Broadcom rose by up to 2%, while Micron traded little changed ahead of its after‑hours earnings release.

Investor sentiment was buoyed by ongoing AI investment activity, with reports that SK Hynix is considering a US listing that could raise up to $29 billion, following the record SpaceX IPO. Broader gains were also supported by falling Treasury yields and the steep drop in oil prices, which eased inflation concerns. The Dow outperformed peers, helped by its greater weighting in traditional sectors; Alphabet is set to replace Verizon in the index next week.

European equity markets ended Wednesday on a mixed note, as declines in banking and semiconductor shares offset gains in other sectors. The Euro STOXX 50 slipped 0.20% to 6 215, while the STOXX Europe 600 edged marginally higher to 635. Investor sentiment was supported by further easing geopolitical tensions after US President Donald Trump stated that Iran would not seek to impose charges on vessels transiting the Strait of Hormuz. This reinforced expectations of lower energy costs, helping to drive Eurozone bond yields lower and boosting consumer-focused stocks. Luxury and retail names, including Adidas, LVMH, Hermès and Inditex, gained as much as 3%.

Banks, however, came under pressure as investors locked in recent gains. Defence stocks were also weaker, with Rheinmetall tumbling 19% following reports that Germany may abandon plans to build its largest warship since World War II. Meanwhile, biotechnology company Argenx fell more than 7% after disappointing updates relating to a clinical trial for its myositis treatment. Among the major regional indices, Germany's DAX 40 declined around 0.07%, while the UK's FTSE 100 outperformed its European peers, supported by strong corporate earnings and robust gains in the property sector.

Asian equity markets closed mixed as investors attempted to regain footing following the previous session’s sharp technology-led sell-off, driven by concerns surrounding AI-related spending. Performance across the region was uneven, with South Korean shares recovering some lost ground despite a volatile trading session, while Japanese and Taiwanese markets remained under pressure. Japan’s Nikkei 225 ended nearly 1% lower, whereas Chinese markets posted modest gains, with the Shanghai Composite and Hang Seng Index rising 0.07% and 0.42%, respectively.

South African equities ended firmly weaker. The JSE All Share Index declined 1.62%, while the Top 40 Index fell 1.79%. Resources and Metals and Mining sectors led the losses dropping 5.25% and 5.66%, respectively, as weaker commodity prices weighed on sentiment.