Markets rallied as optimism grew over trade easing

The rand strengthened on Monday as investors turned their attention to upcoming inflation data and the potential removal of South Africa from the Financial Action Task Force’s (FATF) “grey list.” Analysts are closely monitoring September’s consumer price inflation figures for insights into the state of the local economy. The JSE ended the day firmer, up 0.53%, as traders positioned themselves ahead of several key economic releases expected later in the week. The Top 40 index advanced 0.57%, while the JSE Financial 15 gained 1.43%.

In the US, equities rallied on Monday, buoyed by optimism ahead of corporate earnings reports and renewed confidence in the banking sector. The S&P 500 and Dow Jones each gained 1.10%, while the Nasdaq 100 advanced 1.40% to close at a record high. Major banks, including Wells Fargo and Citigroup, climbed 3.30% and 2.30%, respectively, as investor concerns over credit stress and non-performing loans eased. On the corporate front, Apple’s share price surged 4.40% to a new high following reports of strong iPhone 17 sales in both the US and China. Broader market sentiment also improved after President Donald Trump signalled an easing of trade tensions with China ahead of upcoming talks in Malaysia, with reports indicating that several tariff exemptions had been granted on Chinese imports.

The upbeat momentum in US equities extended to the commodities market, where gold prices surged more than 2%, climbing above $4 345 per ounce to a new record high. The rally was supported by growing expectations of further interest rate cuts by the US Federal Reserve and sustained safe-haven demand amid ongoing uncertainty over the US government shutdown. Although White House economic adviser Kevin Hassett suggested the shutdown could be resolved within the week, investors remained cautious, keeping demand for gold elevated. Other precious metals also advanced, with silver and platinum rising 1.24% and 1.88%, respectively, while Brent crude oil slipped 1.21%.

European markets mirrored the global uptrend. The STOXX 50 jumped 1.40% to an all-time high of 5 688, while the STOXX 600 gained 1.10% to 572 as fears over US banking instability eased and trade relations between Washington and Beijing appeared to improve. The FTSE 100 rose 0.60%, recovering from last week’s losses, led by gains in defence stocks amid renewed geopolitical tensions.

In Asia, the Hang Seng Index rose 2.40% to 25 859, rebounding from sharp losses in the previous session as gains were recorded across all sectors. The upbeat tone was underpinned by stronger US futures and renewed optimism over a potential US–China trade breakthrough. Japan’s Nikkei advanced 3.37% to a record 49 186, while the Topix Index gained 2.46% to 3 248. Investors positioned themselves ahead of Japan’s leadership vote, with sentiment lifted by news that the ruling Liberal Democratic Party and the Japan Innovation Party had agreed to form a coalition government – a move that could pave the way for Sanae Takaichi to become the country’s first female prime minister.