Investors weigh rising oil prices against corporate earnings outlook

US equities delivered a mixed performance on Monday as investors positioned themselves ahead of a busy week of earnings releases and key inflation data. The Dow Jones Industrial Average rose by 196 points, while the S&P 500 was little changed and the Nasdaq Composite declined by 0.40%. Technology stocks weighed on the broader market, with Micron Technology falling 3.90% as competition from China’s ChangXin Memory Technologies remained a concern. Nvidia also lost 1.30%. Elsewhere, Meta gained 3.40% after unveiling a long-awaited artificial intelligence (AI) model, while Salesforce rose 2.10% following an upgrade from Bank of America. Higher oil prices supported energy stocks, with Chevron adding 1.40%.

Geopolitical developments added to concerns about energy supply. Oil prices climbed following deadly strikes on Riyadh’s airport over the weekend, while uncertainty persisted around the security of energy infrastructure in the Russia-Ukraine conflict. Ukrainian President Volodymyr Zelenskyy reported further Russian attacks on energy facilities, despite US President Donald Trump pointing to renewed Russian diesel exports and a ceasefire agreement covering energy targets.

Attention now turns to corporate results for signs of continued earnings resilience. FactSet estimates point to third-quarter S&P 500 earnings growth of 29.60% year on year. If achieved, this would represent a fourth consecutive quarter of growth exceeding 25%, with investment in AI data centres remaining a key source of support.

European equities extended their gains on Monday, supported by optimism around global earnings growth and strength in banking stocks, despite elevated bond yields. The STOXX Europe 600 advanced 0.60% to 635, while the Euro STOXX 50 gained 0.40% to 6 169. UK’s FTSE 100 climbed 1%, following a 1.10% gain in the previous session, with Lloyds Banking Group rising by more than 2% and HSBC gaining close to 2%. Standard Chartered added 1.80%, while Barclays and NatWest rose 1.50% and 1.40%, respectively. Germany’s DAX rose 0.63% and France’s CAC 40 gained 0.38%.

Luxury stocks also performed well ahead of upcoming results, with LVMH adding 1.20% before its third-quarter revenue update and Hermès climbing by more than 2%. In contrast, ASML fell 1.50%, reflecting broader weakness among AI infrastructure-related shares.

Asian markets ended mixed on Monday as investors remained cautious ahead of the corporate earnings season, with concerns about AI-related spending and movements in oil prices adding to uncertainty. Technology shares came under pressure, where heavy losses among major chipmakers weighed on sentiment. The MSCI Asia-Pacific Index excluding Japan fell by around 0.50%. Hong Kong’s Hang Seng Index bucked the broader trend, edging 0.20% higher to 24 249.73, while the Shanghai Composite declined 0.43% to 3 797.24. Japan’s Nikkei 225 was closed for a public holiday.

South African equities ended Monday on a mixed note, although the JSE All Share Index gained 0.22% to 108 759.84 points. The modest advance came as the rand held firm around R16.54 against the US dollar and domestic bond yields remained steady. However, concerns over rising fuel costs and ongoing global market uncertainty continued to weigh on sentiment.

In corporate news, the JSE announced that sugar producer Tongaat Hulett will be delisted on 3 November 2026, ending its 74-year presence on the exchange following a prolonged trading suspension and business rescue proceedings.

Oil prices advanced by around 2%, with Brent crude rising 2.25% to $107 a barrel. Uncertainty surrounding the proposed energy ceasefire between Russia and Ukraine, together with comments by US President Donald Trump about potentially joining Saudi Arabia in military action against Iran-backed Houthi forces in Yemen, heightened concerns over escalating tensions in the Middle East.

Precious metals were largely weaker, with gold falling 0.52% to $4 171.87 an ounce and silver losing almost 1%. Platinum, however, edged 0.07% higher.