Markets climb as investors weigh earnings resilience against geopolitical risks

US equities ended Wednesday mixed, with the S&P 500 closing 0.20% lower and the Dow Jones Industrial Average gaining 263 points to reach a new record high, as encouraging economic developments and another strong round of corporate earnings helped buoy sentiment. The Nasdaq Composite, however, slipped 0.80%. US Treasury yields continued to ease after officials indicated they were pursuing diplomatic efforts with Iran aimed at restoring trade flows through the Middle East.

On the corporate front, Arista Networks climbed 3.60% after reporting revenue above market expectations, while Eli Lilly surged 4.90% after posting stronger-than-expected sales and lifting full-year guidance. On the weaker side, SpaceX fell 13.60%, giving back much of the previous session’s rally as investors focused on the prospect of a sizeable release of IPO shares by early investors. AMD also declined 7%, despite a sharp increase in data centre revenue, as the results failed to fully meet elevated expectations.

European markets also ended the day on a mixed note, with major indices remaining close to the record highs reached earlier this week as investors digested another round of corporate earnings. The Euro STOXX 50 edged slightly lower to 6 448, while the STOXX Europe 50 gained 0.10%. In Germany, the DAX 40 reversed early gains to close 0.30% lower at 26 139, as some investors locked in profits after a strong run that had taken the index to successive record highs. The FTSE 100 added 0.08%.

Corporate earnings remained the main driver. Siemens Energy ended little changed despite better-than-expected earnings, supported by record order intake as demand for data centre power infrastructure continued to strengthen. SAP rose more than 1% on positive sentiment across the global software sector, while Bayer and Argenx each advanced more than 2% after a solid session for pharmaceutical stocks. In contrast, Infineon Technologies fell 5.70% after its forward guidance disappointed investors and DHL lost 3.70% following the release of its latest financial results. Novo Nordisk ended broadly unchanged despite raising its outlook, with lingering concerns over the long-term prospects for its obesity treatment business limiting gains.

Asian markets closed notably higher, with technology stocks leading the advance across the region. The rally was supported by easing oil prices as investors grew more optimistic about potential US-Iran discussions to restore shipping activity through the Strait of Hormuz. Chipmakers and artificial intelligence-related companies staged a strong recovery after July’s weakness, helped by upbeat corporate outlooks and renewed confidence in the global technology sector. Japan’s SoftBank Group was among the standout performers, surging almost 14% after reporting strong quarterly results and giving an upbeat outlook for the future growth potential of its AI investments.

Japan’s Nikkei closed almost 4% higher, while the Shanghai Composite increased by 1.40% and the Hang Seng ended modestly higher at 0.17%.

Global commodity markets climbed at 21h25 SAST, reversing earlier reports of significant pressure on energy prices. Brent crude rose 0.15% to trade at $79.48 per barrel. Precious metals also rallied, with gold trading in the region of $4 255.36 per ounce, up 4.40%, as investors continued to seek defensive assets.

South African markets ended Wednesday mostly higher, supported by improved global risk sentiment. The benchmark FTSE/JSE All Share Index gained 1.01% to close at 115 416 points, while the Top 40 Index advanced 1.11% to finish at 107 377 points. Metals and Mining led the gains, closing 6.50% higher. Meanwhile, the rand remained relatively firm, trading at around R16.36 against the US dollar.