Global markets mixed as investors weigh oil prices and Fed rate outlook

Global markets traded mixed on Tuesday as investors assessed energy prices, geopolitical developments and the outlook for US monetary policy. US equities remained slightly lower, while European markets edged higher to record levels. Asian markets weakened as renewed uncertainty over US-Iran tensions weighed on investor sentiment.

US equities traded below the flatline, with the S&P 500 declining 0.30% and the Dow Jones Industrial Average losing 184 points, while the Nasdaq 100 fell 0.30%. Investor attention remained focused on energy prices and the possibility of a Federal Reserve (Fed) rate hike next month, with markets pricing roughly even odds of rates being raised or left unchanged. The yield on the 10-year US Treasury note fell to 4.68% from above 4.71% in the previous session as oil prices steadied amid signs of diplomatic efforts to reach an agreement between the US and Iran. Attention is now shifting to today’s US consumer price inflation data, which is expected to provide further insight into the outlook for interest rates.

European markets edged higher, with the STOXX Europe 600 rising to a record 660.8 and the Euro STOXX 50 gaining 0.50% to a record 6 553. Technology and energy shares supported gains, with ASML advancing 2.70% and Siemens Energy rising close to 3%. Germany’s DAX 40 climbed 0.30% to a record 26 385, led by utilities and energy-related shares. France’s CAC 40 eased 0.10% to 8 715 as renewed geopolitical tensions weighed on luxury, industrial, and financial stocks. London's FTSE 100 was little changed as gains in energy shares offset weakness in defensive stocks.

Asian markets weakened. China's Shanghai Composite fell 0.82% to 3 934.1, while the Shenzhen Component declined 0.40% to 14 259.4 as fading optimism over a near-term easing of US-Iran tensions weighed on sentiment. Japan's yen weakened past 159 per US dollar as the currency remained under pressure from wider interest-rate differentials, fiscal concerns, and elevated energy and import costs.

South African equities ended sharply lower on Tuesday. The FTSE/JSE All Share Index declined 1.34% to 115 942.72 points, while the Top 40 Index fell 1.38%. Industrial shares underperformed, with the Industrial 25 Index falling 2.86%, while financial shares declined 1.38%. The rand weakened 0.16% against the US dollar to R16.22, 0.11% against the British pound to R21.90, and 0.13% against the euro to R18.71.

South Africa's unemployment rate rose to 33.60% in 2Q26 from 32.70% in the first quarter, with the number of unemployed people increasing 4.20% to 8.481 million. Employment edged 0.10% lower to 16.739 million.

Commodity markets were mixed. At 20h19 SAST, Brent crude oil rose 1.16% to $88.74 per barrel as traders weighed conflicting signals around developments in the Middle East. Gold declined 0.40% to $4 370.94 per ounce at 20h57 SAST, while silver fell 1.57% to $64.70 per ounce and platinum eased 0.20% to $1 750.05 per ounce.