The US-imposed 50% tariff on imported steel and aluminium came into effect on Wednesday, affecting most trading partners, including China. However, the United Kingdom has been excluded, with tariffs on its exports remaining at 25%. The move has heightened trade tensions and contributed to growing concerns over the US economic outlook. The US Dollar Index edged down toward 98.8, nearing Tuesday’s six-week low of 98.6, as a string of weak economic data weighed on sentiment.

The latest ISM Services PMI showed the sector contracted in May 2025 for the first time in nearly a year, dragged down by a sharp drop in new business and rising input costs—likely influenced by the new tariffs. US equities ended higher, with the S&P 500 up by 0.28% closing at 5 986.96, the Dow Jones gaining 0.13% and the Nasdaq rising 0.36%. Meanwhile, the yield on the 10-year US Treasury note fell by around 9 basis points to below 4.40%, marking its lowest level in about a month. Attention now shifts to Friday’s nonfarm payrolls report, which is expected to offer further insight into the Federal Reserve’s next policy moves. While President Donald Trump continues to pressure the Fed to cut interest rates, officials remain cautious amid the growing trade-related uncertainty.

European stock markets advanced following comments from the EU trade commissioner, who stated that discussions with the US were “moving in the right direction.” The pan-European Stoxx Europe 600 index ended the session up by approximately 0.50%. Other key indices also posted gains, with the UK’s FTSE 100 rising 0.16%, while Germany’s DAX climbed by 0.69% and France’s CAC 40 adding 0.53%. Looking ahead, investors will be paying close attention to any shifts in forward guidance, amid growing expectations that the European Central Bank may pause rate cuts in July. The ECB is likely to reassess the situation after August, particularly to evaluate the effects of newly imposed US tariffs on the Eurozone economy and inflation. In a further development for the region, Bulgaria received the green light on Wednesday to join the eurozone, setting the stage for the bloc to expand from 20 to 21 member states.

Asian markets closed mostly higher, with Japan’s Nikkei 225 rising 0.80% and Hong Kong’s Hang Seng Index gaining 0.49%. In China, the Shanghai Composite increased by 0.45%. Overall, the region experienced modest gains as markets remained cautious amid ongoing global economic uncertainties.

Local equities rose, with the FTSE/JSE All Share Index gaining 0.81% to close at 95 650.16 points, nearing its all-time high. The JSE Top 40 Index also improved, climbing 0.93% to finish at 87 990 points. The rand strengthened modestly by 0.32%, closing at R17.79 to the US dollar. However, the RMB/BER Business Confidence Index fell to 40 in 2Q25, down from 45 in the previous two quarters. According to RMB, confidence weakened across most sectors, including retail, motor dealerships, construction, and manufacturing, with wholesale trade being the only segment to record an improvement.

Commodities delivered a mixed performance. Brent crude oil fell by 1.13% to $64.89 per barrel. Over the past four weeks, WTI crude oil has risen by 11.69%, though it remains 13.85% lower over the past 12 months. Meanwhile, gold edged up by 0.10% to trade at $3 374.23.