Wall Street hits new highs as strong earnings and US-China talks boost sentiment

Wall Street’s key indices traded near record levels on Friday as investors digested strong corporate earnings and indications of progress in US-China relations. The S&P 500 rose 0.32% and the Nasdaq 100 closed 0.51% higher, while the Dow climbed over 100 points, building on the all-time highs reached in the previous session. FedEx surged nearly 3% after reporting results that exceeded expectations and Apple jumped 2.80% following a price target upgrade from JP Morgan and the unveiling of its latest iPhone. Tesla advanced 1.50% after being upgraded to ‘outperform’ by Baird, boosting both the tech and consumer discretionary sectors. Markets also followed a lengthy call between President Donald Trump and China’s Xi Jinping, during which President Trump pointed to progress on trade, fentanyl and a potential TikTok deal.

European equities closed modestly higher, as gains in the heavyweight financial sector offset mixed performances across other areas, while investors continued to digest key monetary policy developments from the week. The Eurozone’s STOXX 50 rose 0.20% to 5 467, with the broader pan-European STOXX 600 largely unchanged at 555. In contrast, the FTSE 100 underperformed, slipping 0.12%. The Bank of Japan left interest rates on hold as expected but surprised markets by signalling plans to begin unwinding its substantial ETF holdings, adding to investor caution. Banks led the European gains, with Santander, BNP Paribas and Nordea rising around 2%, while aerospace names Airbus and Safran advanced 1.40% and 2.30%, respectively. Conversely, Maersk tumbled 6% due to plunging freight rates.

In Asia, currencies were generally weaker, with the Hang Seng down 0.04%, the Nikkei falling 0.57% and Shanghai closing 0.18% lower, reflecting a more cautious investor mood across the region. Stock markets showed mixed performances following Japan’s annual inflation rate easing to 2.70% in August from 3.10% the previous month, marking the lowest reading since October 2024. Meanwhile, foreign direct investment (FDI) in China fell 12.70% year-on-year, although Japanese investment in China rose sharply by 58.90%. Despite the overall decline, foreign capital continued to show strong interest in China’s high-tech sectors, highlighting sustained investor focus on advanced industries.

On the commodity front, gold continued its strong run on Friday, climbing to $3 680 per ounce, up by nearly 1% and marking a fifth consecutive weekly gain. Following Wednesday’s Fed rate cut, spot gold briefly touched a record $3 707.40 before pulling back amid volatile trading. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, keeping the precious metal on an upward trajectory. Year-to-date, gold has surged around 39%. Other precious metals also advanced, with silver rising 2.70% and platinum up 1.30%. Meanwhile, Brent crude bucked the trend, slipping by 1.13% to $66.68 per barrel as oil markets reacted to global supply and demand signals.

In South Africa, shares gained momentum, with the All-Share Index rising 0.65% and the Top 40 climbing 0.69%. Resources led the charge, surging 3.90%, while the rand strengthened against the dollar, trading at R17.32, up 2.14%, contributing to a broadly positive market tone.