US inflation puts pressure on Wall Street

US equities ended lower on Tuesday as stronger-than-expected inflation data heightened concerns about the interest-rate outlook, while hawkish comments from Federal Reserve officials added further pressure on sentiment. Federal Reserve Governor Christopher Waller warned that a 50-basis-point rate increase in December may be necessary. Both headline and core US inflation rose by more than expected in October, strengthening expectations of a possible rate hike next month and further monetary tightening in 2027. The S&P 500 declined 0.57%, the Dow Jones Industrial Average shed around 200 points and the Nasdaq Composite lost 1.06%.

Investor attention also turned to the anticipated initial public offering of artificial intelligence (AI) company Anthropic, which could take place as early as next week. The company is reportedly seeking to raise up to US$90 billion, potentially giving it a diluted valuation of around US$1.4 trillion. While demand for AI services remains strong, concerns about the scale of investment required and whether returns will justify the expenditure are weighing on the sector. Technology shares remained under pressure, with Nvidia falling nearly 6% and Micron losing almost 3%. Microsoft and Oracle also declined by more than 2%.

European markets extended their gains, supported by improved risk appetite, lower oil prices and strength in banking and technology shares. The Euro STOXX 50 advanced 0.59% to 6 327.87, while the STOXX Europe 600 rose 0.40% to 659.1, bringing it closer to its record high reached in August. At 18h27 SAST, Germany’s DAX was up 0.42% at 26 378.73 and France’s CAC 40 had gained 0.81% to 8 299.61. In contrast, the UK’s FTSE 100 slipped 0.07% to 10 774.83, weighed down by losses among major oil and energy companies as crude prices retreated.

Banking shares were among the strongest performers, supported by upbeat earnings. UniCredit climbed 2.40% following strong results and optimism surrounding its proposed takeover of Commerzbank. In the technology sector, ASML gained 1.30%, extending its recovery after TSMC delivered a positive outlook for the semiconductor industry. Investors continued to assess the strength and sustainability of AI-related demand and investment ahead of Anthropic’s anticipated US listing.

Asian markets closed higher on Tuesday, tracking Wall Street’s strong overnight rebound, led by technology and semiconductor shares. Japan’s Nikkei 225 advanced 2.87% to 60 459.58, recovering some of last week’s losses as chipmakers and technology companies, including SoftBank Group, Tokyo Electron and Advantest, posted strong gains. Hong Kong’s Hang Seng Index rose 0.33% to 24 530.50, while the Shanghai Composite edged 0.11% higher following stronger-than-expected trade data. China’s exports increased by 35.20% year on year in October, while imports rose 41.60%. The country’s cumulative trade surplus for the first ten months of the year also exceeded US$1 trillion.

South African equities closed mostly lower, with the JSE All Share Index declining 0.30% to 114 693.44 and the Top 40 losing 0.33%. Losses were concentrated in resource stocks, with the Resources index falling 2.60% and Metals and Mining shedding 3.24%, reflecting weaker global precious-metal prices. Industrials bucked the trend, gaining 1.06%, while financials added 0.51%, supported by relative strength in local banking and retail shares. The rand also weakened, trading at R16.54 against the US dollar, R22.07 against the pound and R18.47 against the euro at 20h52 SAST.

On the domestic economic front, conditions remained challenging as the unemployment rate edged up to 33.70% in 3Q26. Job creation continued to lag behind the number of people entering the labour market, particularly in the agricultural and informal sectors, highlighting the economy’s ongoing struggle to generate sufficient employment.

Commodities, Brent crude fell 1.13% to US$91.52 a barrel by 20h59 SAST as investors weighed the prospects of talks between the US and Iran. Precious metals also traded lower, pressured by a stronger US dollar and rising US Treasury yields. Gold declined 2.68% to $4 028.17 an ounce, while silver recorded the steepest loss, falling 3.94% to $51.31. Platinum also slipped 1.47% to $1 538.75.