Global markets mixed as US tech rebounds and SA fuel prices rise

US equities regained some ground on Wednesday, with technology stocks helping to offset earlier losses in the week. The S&P 500 gained 0.50%, the Nasdaq 100 increased by 0.20% and the Dow rose by 295 points. Even so, the broader market remained constrained by higher bond yields. The 10-year US Treasury yield moved above 4.80%, its highest level since October 2023, as markets weighed the prospect of higher interest rates, heavy corporate debt issuance and growing concerns about the US fiscal deficit.

Demand for funding from artificial intelligence (AI) companies has also added pressure to bond markets, with estimates suggesting the sector has raised around $1.5 trillion in debt this year. At the same time, concerns about potential Japanese intervention in the currency market have added to the pressure on Treasuries. The rise in yields continued despite Treasury Secretary Bessent announcing an expansion of the government's long-term bond buyback programme.

Technology and banking stocks led the recovery as investors responded to renewed strength in some of the market’s largest companies. Meta rose 2.50%, while Wells Fargo gained 3%. Nvidia climbed 3.20% following reports that it is considering a $14 billion acquisition of Hugging Face. Dell also surged by 15.80% after beating earnings expectations and raising its revenue outlook. Palo Alto Networks moved in the opposite direction, falling 9.30% despite reporting better-than-expected results. Broadcom fell 0.70% ahead of its earnings report after the closing bell.

European equities ended the day slightly lower, with the major indices holding around their lowest levels in a month as higher borrowing costs continued to weigh on sentiment. The Euro STOXX 50 fell 0.10% to 6 363, while the STOXX Europe 600 slipped 0.20% to 646. Meanwhile, UK’s FTSE underperformed dropping 0.30%, Germany’s DAX dropped almost 0.50% and France’s CAC declined 0.21%.

Renewed fighting in the Middle East added to inflation concerns, limiting expectations for easier monetary policy. At the same time, selling in government bonds intensified, pushing longer-dated yields to multi-decade highs across several European markets. Utilities were among the main laggards as European natural gas prices continued to climb. Consumer-facing companies also struggled, with Inditex down 2% and LVMH falling 2.50%. Volkswagen was another notable decliner, dropping almost 4% after it was announced that the company will leave the STOXX 50 index. Nokia will take its place, reflecting the strong performance of the Finnish telecoms group amid growing demand for infrastructure supporting the global AI build-out.

Asian equities were also weighed on Wednesday as the escalating tensions pushed oil prices higher and added to the global bond market sell-off. Japan was among the hardest hit, with the Nikkei 225 falling 2.85% to 64 325.64. SoftBank Group dropped 6.40%, while major chipmakers weakened, including Samsung Electronics, which fell 4% and SK Hynix that lost 4.70%. Chinese markets moved lower with the Shanghai Composite declining 0.96% as domestic investors reduced their exposure, while Hong Kong’s Hang Seng slipped 0.24%. Shein was a notable decliner in Hong Kong, falling 5.20% in its second day of trading.

South African equities fell for a second consecutive session ending the day with the FTSE/JSE All Share Index down 0.67% and the Top 40 declining 0.58%. Metals and Mining was among the weakest-performing sectors, falling 0.70%, while Financials edged 0.04% higher. The market was also influenced by the latest quarterly index changes, which were announced at 17h47 SAST on Wednesday. The adjustments affect the free-float weightings of companies across key benchmarks, including the Top 40 and SWIX, typically resulting in increased trading activity as institutional investors rebalance their portfolios.

Broader risk aversion continued to shape sentiment, with the airstrikes pushing oil prices to a five-week high. Higher crude prices provided some support to local energy and resource counters, including Sasol, although the broader market remained under pressure. Individual share movements also influenced the day’s performance. Aspen Pharmacare rallied after signalling expectations for double-digit growth, supported by the potential of its obesity-treatment pipeline. Meanwhile, higher domestic fuel prices added to pressure on businesses and consumers, with petrol increasing by R1.34 a litre and diesel by around R3.00 a litre with effect from 2 September 2026. The increase added to concerns around operating costs and household spending, particularly for industrial and retail companies.

Commodity markets ended Wednesday on a mixed note, with energy prices moving higher as Brent crude gained close to 1%, rising above $95 a barrel, while WTI moved above $91. Gold rose 0.85% trading at $4 365 per ounce at 19h20 SAST. Despite the renewed geopolitical tensions, the precious metal struggled to benefit from safe-haven demand as higher oil prices added to inflation concerns and pushed bond yields higher. Silver remained stable at around $64 an ounce, while platinum edged lower.