Global stocks rise as AI chips rally and ECB tightens policy

Market Commentary

Wall Street bounced back on Thursday, trimming earlier losses after a period at one‑month lows. The Nasdaq 100 climbed 0.80%, the Dow rose 0.50% and the S&P 500 added 0.30%. Momentum remained concentrated in artificial intelligence (AI)‑infrastructure names ahead of the SpaceX IPO, which attracted retail orders exceeding $100 billion and is set to be the largest offering in history as AI firms seek capital to expand data‑centre capacity.

Chipmakers led the advance, with Micron and AMD rising more than 3%, while Lam Research and Applied Materials climbed over 8%. Intel surged 9% after Bank of America upgraded the stock, citing a sharp rise in CPU orders. By contrast, Oracle tumbled 12% after revealing plans to take on additional debt to fund data‑centre investment despite flat sales. Defensive sectors also gained after President Donald Trump said strikes against Iran would resume and that the US intends seizing Kharg Island.

Crude traded around $90 a barrel as markets weighed regional geopolitical risks against generally uninterrupted global supply. Direct talks between the UAE and Iran raised hopes of de‑escalation and key oil infrastructure has largely avoided damage so far, averting the supply shock some traders feared. Chinese imports of Saudi crude are projected to decline in July, even though tanker traffic through the Strait of Hormuz has picked up. Inventories are tightening in key locations – US crude stocks, including strategic reserves, have fallen sharply in recent weeks.

Precious metals found some support, with gold up 2% at $4 147.05 per ounce and silver rising more than 4%.

European markets closed higher on Thursday, ending a four‑day slide as investors digested policy moves and geopolitical developments. The STOXX 50 closed at 6 056.96, climbing 0.78%, while the STOXX Europe 600 rose 0.54%. The rally followed the European Central Bank’s (ECB) decision to raise interest rates by 25 basis points, its first increase since 2023. ECB officials said the move was necessary to help anchor inflation around the 2% medium‑term target, citing rising energy costs and persistent upside risks. Policymakers highlighted the Middle East conflict and related disruptions to oil flows as factors compounding inflationary pressures. UK’s FTSE 100 advanced 0.40%, building on Wednesday’s 0.30% rise, with gains led by financials and miners.

Asian markets were mixed as investors weighed renewed US-Iran tensions against signs of moderated risk appetite. South Korea bucked the regional downtrend to close higher, while Japan’s Nikkei ended marginally up by 0.06% after buyers returned late in the session. Mainland and Hong Kong bourses fell: the Shanghai Composite slipped 0.16% and the Hang Seng dropped 0.77% as investors pared positions in technology and other growth names. Markets remained sensitive to developments in the Middle East and to oil price moves, as participants continued to monitor US economic data and inflation trends.

Thursday was positive for South Africa, with equities closing in the green: the JSE All Share Index (ALSI) and the Top 40 climbed more than 0.60%. Financials led gains, rising 0.85%. The rand strengthened by 1.33% against the US dollar amid dollar weakness.