Global markets retreat as oil rebound revives interest-rate concerns

Global markets traded mixed on Thursday as higher oil prices and renewed inflation concerns weighed on investor sentiment. US equities retreated after stronger energy prices revived expectations that the Federal Reserve (Fed) could raise interest rates next month, while European markets closed modestly higher on the back of resilient corporate earnings. Asian markets delivered a mixed performance as investors continued to reassess the outlook for artificial intelligence (AI)-related shares.

US equities closed lower, with the S&P 500 declining 0.20%, the Nasdaq 100 easing 0.40%, and the Dow Jones Industrial Average falling 464 points. Investor sentiment weakened as crude oil prices rebounded following reports that Iran is considering restrictions on shipping through the Strait of Hormuz, raising concerns that higher energy prices could keep inflation elevated. Financial stocks came under pressure, with JPMorgan declining 0.80% and Morgan Stanley falling 2.10%, while Alphabet lost 1.30%. Among notable movers, Western Digital fell 13% after disappointing guidance, Sandisk declined 6.80% following weaker-than-expected results, and SpaceX gained 6.10% as shares exited their post-IPO lock-up period.

Higher energy prices also influenced bond markets. The yield on the 10-year US Treasury note remained elevated after concerns that sustained inflation could prompt further monetary tightening. Investors also continued to monitor developments surrounding the Fed after reports suggested Chair Kevin Warsh remains prepared to raise interest rates should inflation accelerate further.

European markets ended slightly higher despite lingering geopolitical uncertainty. The STOXX Europe 600 gained 0.20% and the Euro STOXX 50 rose 0.40%, supported by stronger corporate earnings and renewed demand for AI-related shares. Germany's DAX 40 added 0.05%, while France's CAC 40 gained 0.30% as luxury stocks advanced following encouraging earnings results. London's FTSE 100 erased early gains to close marginally lower, with weakness in heavyweight dividend-paying and energy shares outweighing gains elsewhere.

Asian markets closed mixed. China's Shanghai Composite advanced 0.57%, while the Shenzhen Component inched 0.24% lower as gains in gold mining shares offset weakness in AI and semiconductor stocks, while Japan's Nikkei 225 declined 0.93% as technology shares remained under pressure despite easing concerns around the Strait of Hormuz.

South African equities ended marginally lower on Thursday. The FTSE/JSE All Share Index eased 0.09% to 115 306.31 points, while the Top 40 Index declined 0.11%. Financial shares outperformed, with the Financial 15 Index gaining 0.50%, while resource and industrial shares weakened. South Africa's 10-year government bond yield rose to around 8.55% as investors continued to assess the inflation implications of higher energy prices and the possibility of further policy tightening globally. The rand weakened against the US dollar by 0.26% to R16.35 and against the British pound by 0.13% to R22.00, while strengthening marginally by 0.06% against the euro to R18.84.

Commodity markets were mixed. At 21h00 SAST, Brent crude oil rose 4.13% to $82.73 per barrel. Gold edged 0.17% lower to $4 238.30 per ounce at 21h27 SAST, while silver declined 0.81% to $61.58 per ounce, and platinum eased 0.56% to $1 737.10 per ounce.