Global markets consolidate as easing geopolitical tensions support risk sentiment

Market Commentary

US stocks were mixed on Friday, consolidating this week’s rally as easing geopolitical tensions supported sentiment. The S&P 500 and Nasdaq 100 rose up to 0.50%, extending gains towards an eighth straight session, aided by optimism from President Trump on potential progress with Iran ahead of weekend talks. At the same time, improved tanker flows through the Strait of Hormuz helped ease concerns around energy-driven inflation shocks that have weighed on markets since early March. While elevated oil and gas prices pushed US inflation to a near two-year high in March, expectations are for moderation if Persian Gulf supply normalises. Against this backdrop, speculative tech stocks outperformed, with Amazon and Meta up around 2% and Nvidia adding close to 1% following strong TSMC results, while financials edged lower ahead of next week’s earnings, leaving the Dow slightly below flat.

European stocks held steady on Friday, supported by signs of easing geopolitical tensions that could reduce supply pressures on key energy commodities. The Eurozone’s STOXX 50 rose 0.50% to 5 933 points, while the broader STOXX 600 added 0.40% to 615. Sentiment improved as Ukrainian officials signalled renewed optimism around talks with Russia, alongside a more measured tone from Donald Trump on Iran and evidence of vessels moving through the Strait of Hormuz. These developments strengthened the outlook for European energy supply, which has been threatened by both conflicts. Banks advanced despite higher bond yields, with UniCredit, Nordea and BBVA gaining 2%, while lower natural gas prices supported industrials such as Schneider and Siemens, which also rose around 2%. For the week, the STOXX 50 gained 4.20%.

In Asia, Chinese equities advanced, with the Shanghai Composite rising 0.50% and the Shenzhen Component climbing 2.20%, supported by cautious optimism around upcoming diplomatic engagements. Data showed consumer inflation easing to 1% in March, while producer prices recorded their first increase since late 2022, reflecting rising global energy costs. Although China’s energy supply and strategic reserves have helped buffer external pressures, early signs of domestic pass-through are emerging, with authorities implementing a third fuel price increase since February. Market gains were led by technology and industrial names, including Contemporary Amperex Technology, Zhongji Innolight and Luxshare Precision Industry, with the major indices posting solid weekly advances.

Locally, markets delivered a mixed performance, with the FTSE/JSE All Share Index advancing 0.69% to 119 025, supported by gains in broader components, while the Top 40 declined 1.10% to 110 453 amid profit-taking following earlier strength. The rand weakened marginally to R16.43/$ by the close of business, alongside softer moves in other major currency crosses, as gold held firm and Brent crude eased on improving supply expectations. Resource stocks came under pressure in line with softer commodity prices, while industrials were mixed despite signs of expansion in manufacturing activity. Overall sentiment remained underpinned by firmer global cues, although some consolidation emerged after the week’s earlier gains.

In commodities, gold prices held steady while remaining on track for a weekly gain, supported by a softer US dollar, although sentiment stayed cautious as the earlier US-Iran truce faded and geopolitical uncertainty resurfaced. Spot gold hovered around $4 762/oz, up 2% for the week, as lingering tensions in the Middle East continued to underpin safe-haven demand. At the same time, stronger US inflation data, driven by higher energy prices and tariff pass-through, reinforced expectations that interest rates may stay elevated, tempering bullion’s appeal given its lack of yield. Elsewhere, silver advanced, while platinum and palladium declined on the day, though all three metals remained on course for weekly gains.

Oil prices declined on Friday as markets repositioned ahead of renewed US-Iran negotiations, with WTI crude falling 1.30% to $96.57 per barrel and Brent crude easing 0.80% to $95.20. The moves capped a sharp weekly sell-off, with both benchmarks posting their steepest declines in several years as earlier supply concerns linked to disruptions in the Strait of Hormuz began to ease. Despite prices remaining elevated near $100 amid still-constrained Gulf exports, early gains gave way to broad-based liquidation, with traders focusing on upcoming diplomatic engagements and the potential for a more durable de-escalation in the region.