Markets hold steady ahead of key Fed decision

US equities were little changed on Thursday, with the S&P 500, Nasdaq 100 and Dow ending essentially flat as investors looked ahead to next week’s Federal Reserve (Fed) interest rate decision and weighed mixed labour data that still point to a 25 basis point cut. ADP reported a surprise 32 000 drop in private payrolls and Challenger tracked 71 321 planned layoffs in November, reinforcing expectations of easing even as initial jobless claims fell to around 191 000. Treasury yields inched higher, with the 10-year near 4.10%, pressuring rate-sensitive tech stocks while providing a lift to small caps.

European equities followed the muted US tone with modest gains on Thursday, as the STOXX 50 and STOXX 600 both rose 0.30%, extending a two-day advance and underscoring a more constructive global backdrop. Sentiment improved as investors looked ahead to next week’s Fed interest rate decision, while traders continued to monitor geopolitical risks, particularly Ukraine peace talks, with the US special envoy set to meet the country’s top negotiator in Florida today.

In Asia, the Shanghai Composite slipped 0.06% to 3 876 points, while the Shenzhen Component gained 0.40% to 13 007 as mainland equities delivered a mixed performance amid a lack of clear catalysts. Investors are now looking to the annual Central Economic Work Conference and the December Politburo meeting for signals on policy direction and growth priorities. Economists broadly expect Beijing to maintain its “around 5%” growth target for 2026, with fiscal support likely to resemble 2025 in both scale and composition.

Local markets slipped modestly, with the FTSE/JSE All Share Index down about 0.37% to 110 925 points, while South Africa’s 10-year government bond yield eased slightly to around 8.33%, offering some relief in fixed income markets. Investor sentiment remained cautious within equities, as resource-linked stocks, particularly precious-metal miners, continued to support the market amid strong global commodity prices, while companies outside the commodity sector faced pressure from domestic economic uncertainty. The rand held steady against the US dollar, providing a measure of stability for firms with dollar-linked costs or earnings, and its relative calm, aided by lower inflation and improved policy credibility, is helping maintain some foreign investor confidence despite muted local equity appetite.

Commodity markets portrayed a mixed picture on Thursday, with oil and gold drawing particular attention. Brent crude traded near $88 per barrel, supported by ongoing concerns over global supply disruptions and optimism about demand stability amid easing recession fears. Gold prices edged higher to around $2 055 per ounce, benefitting from lingering risk aversion and expectations of continued central bank easing, which bolstered its appeal as a safe-haven asset. While energy markets responded to geopolitical developments and inventory data, gold remained underpinned by cautious investor sentiment, reflecting ongoing uncertainty in global financial markets.