AI optimism supports global equities amid geopolitical uncertainty

US equities moved mostly higher on Wednesday as strong artificial intelligence (AI)-related earnings and a relatively tame inflation (CPI) print supported investor sentiment. Headline CPI rose 0.10% month-on-month, with shelter and food both up by 0.10%, while core CPI increased 2.50% year-on-year. S&P 500 rose 0.30% just shy of its record close, the Nasdaq 100 gained 0.70% and the Dow Jones Industrial Average closed nearly flat. CoreWeave surged almost 20% after reporting stronger-than-expected sales, while Super Micro Computer (SMCI) advanced 19% after raising its revenue forecast.

Chip producers rallied following strong results from Tencent, with Temasek taking fresh stakes in SK Hynix and Samsung, lifting sentiment across the semiconductor complex. Nvidia, Oracle and Micron added 3%, 5.40% and 4.90%, respectively, though hyperscalers gave back earlier advances as Microsoft fell 2.30%, Meta dropped 3.40% and Amazon shed 1.80%.

The yield on the 10-year US Treasury note eased to 4.65% from the previous session as July inflation data remained mostly in line with expectations, reducing some pressure on the Federal Open Market Committee (FOMC) to raise interest rates next month. However, elevated energy prices and continued uncertainty around the return of energy supplies from the Middle East remained inflation concerns. Attention now turns to the outlook for US monetary policy as investors assess the sustainability of the recent easing in price pressures.

European equities retreated from record levels on Wednesday as investors balanced a fresh wave of corporate results against lingering geopolitical tension in the Middle East. The pan European STOXX 600 slipped 0.16% to close at 659.48 points, ending a run of consecutive gains, while the STOXX 50 dropped 0.26%. UK’s FTSE 100 edged lower, falling 0.26% to 6,533.99 after touching an all time high of 6 551.22 earlier in the session. Germany's DAX 40 declined 0.20% after reaching a fresh intraday record, while France's CAC 40 fell 0.50% as weakness in luxury stocks weighed on the index. ASML advanced 2.10%, Infineon Technologies gained 3.70%, and Siemens Energy rose 4 London's FTSE 100 continued its moderate losses for a third consecutive session.

Asian markets finished mixed, with China’s Shanghai Composite edging up 0.32%, underpinned by policy measures aimed at stabilising growth. Japan’s Nikkei 225 advanced 0.83%, lifted by investor interest in AI and technology‑related components. By contrast, Hong Kong’s Hang Seng slipped 0.80%, falling despite strength in mainland property developer shares.

South African equities ended lower on Wednesday, weighed down by sharp losses in technology-focused and heavyweight counters. The FTSE/JSE All Share Index declined 0.83% to 114 980.89 points, while the Top 40 Index fell 0.81%. Industrials underperformed, with the Industrial 25 Index falling 2.99%, while financials declined 0.46%. Resource shares bucked the trend, with the Resources 10 Index gaining 0.98% and Metals and Mining advancing 1.33%. The rand held firm near a five month peak, trading close to R16.15 against the US dollar after in-line US inflation data.

Commodity markets were mixed. At 20h14 SAST, Brent crude oil eased 0.22% to $88.71 per barrel. Gold rose 1.12% to $4 415.65 to trade at per ounce, while silver gained 1.28% to $65.51 per ounce and platinum advanced 0.89% to $1 770.55 per ounce.