Global equities extend gains on easing inflation concerns

Market Commentary

US equity indices rose on Tuesday as technology stocks stabilised and inflation fears eased. The S&P 500 climbed 0.50%, the Nasdaq 100 advanced 1% and the Dow added about 100 points to reach a record high. Artificial intelligence (AI)-related firms continued to rebound from last week’s sell-off after upbeat guidance from chipmakers, despite worrying levels of hyperscalers spending; AMD, Intel, Marvell, Applied Materials, and SanDisk each rose by as much as 7%.

Meanwhile, oil prices hovered around their pre‑war levels, reducing the likelihood that the Federal Reserve (Fed) will resume a hiking cycle. The healthier corporate backdrop supported more traditional, Dow‑heavy sectors, helping the index to outperform others in June. Alphabet was more than 5% higher since its inclusion in the Dow on Monday. The S&P 500 was on track to post a 15% gain for 2Q26, its strongest quarter in six years.

The yield on the 10-year US Treasury note rose to 4.40% after stronger-than-expected US labour market data reinforced expectations that interest rates could remain elevated. Meanwhile, the US dollar index held near 101.1 after pulling back from its recent 15-month high.

European equities advanced strongly, with the Euro STOXX 50 rising 1.50% to a record closing high, while the STOXX Europe 600 gained 0.90%. Softer-than-expected inflation data from Germany, France and Italy strengthened expectations that the European Central Bank may not need to raise interest rates further this year. Technology shares led gains, with ASML surging 7%, while Siemens and Siemens Energy also advanced on improved data-centre demand expectations. Germany's DAX gained 1.12%, while France's CAC 40 was down 0.55%.

The UK's FTSE 100 edged slightly 0.18% higher, supported by strength in aerospace, defence and financial shares. Rolls-Royce, BAE Systems and Lloyds Banking Group were among the notable gainers, while AstraZeneca, Unilever and BP ended lower.

Asian equities finished mixed as investors booked profits at the end of a record quarter, though regional indices still posted their strongest quarterly gains in over a decade. Japan’s Nikkei 225 rose 0.86% as technology and AI-related stocks extended recent advances, helped by a weaker yen that improved the outlook for exporters. Chinese markets strengthened after better-than-expected purchasing managers’ index (PMI) data bolstered confidence in activity, with the Shanghai Composite up 0.52%. In contrast, the Hang Seng fell 0.56%.

Locally, household one‑year‑ahead inflation expectations rose to 4.20% in 2Q26 from 3.60% in the previous quarter. Average expectations two years ahead, a key gauge watched by the central bank, also climbed to 3.90% from 3.60%. South Africa also posted a trade deficit of R1.8 billion in May as exports fell and imports reached their highest level in more than two years.

Markets closed mixed: the JSE All Share Index edged up 0.04%, the Resources 10 and Metals and Mining indices gained 1.10% and 0.90%, respectively, while the Industrial 25 slipped 0.78%. The rand strengthened slightly, finishing at R16.39 to the US dollar, R21.75 to the pound and R18.73 to the euro.

On the commodity front, Brent crude eased 0.16% to $73.03 a barrel. Gold traded around $4 032 an ounce, close to its lowest level in nearly eight months as restrictive Fed policy and a reversal of the dollar‑weakness trade weighed on the metal; it was set for an 11% decline in 2Q26, its worst quarterly fall in decades. Silver rallied toward $60 an ounce, outperforming gold in recent sessions as prospects of strong industrial demand countered pressure from tighter monetary policy.