Markets regain footing as investors look past geopolitical tensions

Market Commentary

US equities closed higher on Wednesday as investors looked past Middle East tensions. The S&P 500 gained 0.70%, while the Nasdaq 100 led the advance with a 1.40% rise. The Dow also finished firmer, supported by easing oil prices and solid economic data that helped calm growth concerns. US Treasury Secretary Scott Bessent indicated that measures to support oil flows through the Persian Gulf are forthcoming, helping WTI crude record its first decline since the conflict began. Although Bessent confirmed that 15% global tariffs will take effect this week, sentiment was supported by stronger-than-expected ADP private payrolls data and signs of easing inflation pressures in the services sector. Technology stocks led the gains, with Micron and AMD each rising more than 5%, while Amazon added nearly 4%. Financials also rebounded, with KKR and Blackstone both advancing around 3%, suggesting some stabilisation after recent volatility in private credit markets. Meanwhile, laser manufacturer nLight reached a 52-week high after jumping 6%, reflecting renewed investor appetite for technology and growth shares.

In Europe, equities staged a strong rebound, recovering part of the previous session’s losses as sentiment improved alongside North American markets and energy price pressures eased. The Eurozone STOXX 50 climbed 1.70%, while the broader STOXX 600 gained 1.40%. Banks led the advance after driving the prior day’s declines, supported by a recovery in European government bonds as a pullback in natural gas prices tempered inflation concerns. Santander, BBVA and Nordea each rose more than 3%. Technology shares also moved higher following the global sector rebound, with ASML and Infineon advancing 3.50% and 5.40%, respectively. Additional support came from reports that the EU may be exempt from the US’s planned global tariff increases.

Asian markets closed sharply lower on Wednesday, as risk-off sentiment gripped the region amid escalating Middle East tensions driving oil prices to multi-month highs, exacerbating inflation fears for energy-importing economies like Japan and China. China's Shanghai Composite dipped 0.98%, pressured by contracting manufacturing and services PMIs alongside Beijing's announcement of a record-low 2026 GDP growth target of 4.50% to 5%, which offered mixed stimulus signals but failed to offset broader economic slowdown concerns. Japan’s Nikkei led regional losses, falling 3.76% as volatility spiked. Metals and engineering shares were hit hardest, with Mitsui Engineering plunging more than 11%, while investors braced for rising cost pressures filtering through corporate earnings. Hong Kong's Hang Seng dropped 2.72%, amid tech and financial sector drags, extending a 6.77% monthly slide despite yearly gains near 6%, fueled by mainland spillover and global panic selling.

Locally, markets rebounded, with the FTSE/JSE All Share Index rising 0.96% and the Top 40 gaining 1.06%, recovering much of the previous session’s sharp sell-off. The advance was largely driven by resource and mining counters, signalling a renewed risk-on tilt in commodity-linked shares. Gold and platinum producers led the gains as safe-haven demand supported bullion prices, lifting rand-denominated miners such as AngloGold Ashanti and Sibanye-Stillwater. Sasol also moved higher as oil prices held near multi-month highs, despite lingering pressure from the double-digit fuel price increases that took effect yesterday. The rebound came against a backdrop of heightened inflation sensitivity, with money markets still pricing a meaningful probability of a 25 basis-point South African Reserve Bank rate hike later in the month. Financial and consumer stocks were more subdued, indicating that the recovery was driven primarily by a resource-led rotation rather than a broad-based rally across the market.

Commodity markets were sharply higher on Wednesday, led by energy and precious metals as Middle‑East‑driven supply risks and safe‑haven flows pushed Brent crude up around 1.30% to roughly $82 per barrel, extending a month‑old surge of over 22% and keeping prices near multi‑year highs amid renewed fears over shipping and production disruptions. Spot gold, after briefly pulling back from record highs above $5 300 per ounce, steadied around $5 118 dollars per ounce, still elevated by geopolitical tensions and expectations of slower‑than‑expected global rate cuts, while silver and industrial metals tracked mixed demand cues from Asia’s modestly improving PMIs. Overall, the commodity complex ended the session in risk-on territory, with strength in energy and inflation-linked assets supporting producers and miners while adding pressure on energy-importing economies and interest-rate-sensitive sectors.