US stocks rally driven by tech giants

Market commentary

US stocks closed higher on Wednesday, with the S&P 500 climbing 0.30%, edging towards a fresh all-time high. The Dow Jones surged by 270 points, while the Nasdaq gained 0.70%, also on track to set a new record. The market rally was driven by a surge in tech stocks, with shares of Salesforce jumping around 10% after exceeding revenue expectations. Marvell Technology also saw a significant increase, rising nearly 19% after issuing an optimistic outlook. Other tech giants such as Apple (0.30%), Microsoft (1.10%), Nvidia (1%), Amazon (1.70%), and Alphabet (0.60%) also saw gains, underscoring the strength of the sector.

Meanwhile, the local bourse closed higher, despite mixed global performance. Investors were focused on US economic data and speeches from officials at the Federal Reserve, with Fed Chair Jerome Powell scheduled to address the New York Times’ summit later that day. Market participants were keen to hear Powell’s insights on future rate cuts and his outlook for the US economy in 2025. The FTSE/JSE All Share Index gained 0.58%, closing at 86 314 points, while the Top 40 Index added 0.56%.

Across the Channel, the UK’s FTSE 100 saw a dip of 0.30%, ending at 8 336 points, ending a five-day rally. AstraZeneca led the declines, dropping nearly 3% after HSBC lowered its target price and amid the announcement of a new executive vice president. The company’s decline was exacerbated by the ongoing investigation of its former executive, Leon Wang, currently detained in China. The mining sector also faced pressure, with both Anglo American (-2.50%) and Glencore (-0.20%) retreating.

In the Eurozone, European stocks mirrored Wall Street’s gains, with the Stoxx 50 rising 0.80% and the Stoxx 600 climbing 0.40%. SAP led the gains, jumping over 4%, followed by Schneider Electric, which saw a 2% increase. The CAC 40 in France gained 0.70%, driven by strong performances from key stocks. However, political tensions in France were high as Prime Minister Michel Barnier used special powers to push through a controversial budget without parliamentary approval. This has prompted opposition parties to file motions of no confidence, with the potential for Barnier's government to collapse following the vote.

In Japan, the Nikkei 225 Index increased slightly by 0.07% to close at 39 276, while the broader Topix Index fell by 0.47% to 2 741, as caution spread following political turmoil in South Korea. The situation unfolded after South Korean President Yoon Suk Yeol declared martial law late on Tuesday, citing efforts to prevent opposition parties from obstructing parliamentary processes. However, he reversed the decision after the National Assembly voted against it, which helped ease concerns.

Chinese markets struggled, with the Shanghai Composite falling 0.42% to 3 365, and the Shenzhen Component dropping 1.02% to 10 604. Investors were cautious following political unrest in South Korea and ongoing economic uncertainties in China. These concerns were heightened by US President-elect Donald Trump’s tariff threats, as well as a deceleration in Chinese services sector growth in November, which added to the market’s unease.

On the commodities front, WTI crude oil futures stabilised around $70 per barrel after a 2.70% rise in the previous session. The price movement was driven by expectations that OPEC+ would further delay its output restoration plans and by new US sanctions targeting Iranian crude oil exports. Gold prices remained steady above $2 640 per ounce, as markets continued to assess the political and monetary landscape, with investors closely monitoring upcoming economic data.