US equities advance amid AI optimism

Market Commentary

US stocks closed higher on Friday, supported by sustained demand for artificial intelligence (AI)-related companies ahead of the start of the earnings season. The S&P 500 rose 0.42%, the Nasdaq 100 gained 0.29% and the Dow Jones Industrial Average added nearly 150 points. Sentiment was further buoyed by the strong US market debut of SK Hynix, whose American depositary receipts (ADRs) surged 13% above their offer price after the company raised $26.5 billion in the largest-ever US listing by a foreign company.

Performance across chipmakers was mixed: Nvidia rose 4% and AMD gained 2%, while Broadcom slipped 0.30% and Intel fell 2.40%. In tech services, Meta jumped 6% after research firm SemiAnalysis published a favourable report on its AI compute business. JPMorgan added 0.30%, while Mastercard and Bank of America each gained 0.70%. In manufacturing, Applied Materials advanced 2.40% and Caterpillar rose 1.60%.

European equities finished mixed, wrapping up a volatile week as a renewed sell-off in technology stocks combined with persistent macroeconomic uncertainty. The Euro STOXX 50 slipped 0.30% to 6 267, while the STOXX Europe 600 was essentially flat at 641. On a weekly basis, the Euro STOXX 50 fell 2.30% and the STOXX Europe 600 dropped 1.80% from last Friday’s record highs.

AI-related names in Europe retreated after Thursday’s rally, as investors continued to question whether demand for AI infrastructure will deliver durable long-term returns. ASML fell 2.10%, Siemens Energy dropped 2.60% and Infineon eased 1.30%. Bank shares were firmer after another robust session for Eurozone sovereign bonds, with BBVA, Deutsche Bank and UniCredit each rising about 1.50%.

The UK’s FTSE 100 climbed on Friday as markets steadied following a turbulent week driven by renewed Middle East tensions. Vodafone rose nearly 13% after French billionaire Xavier Niel agreed to buy Emirates Telecommunications’ stake, making him the company’s largest shareholder.

On the commodities front, oil prices fell, but still ended the week higher as the US-Iran confrontation continued to cloud global energy supplies. Brent traded around $75 a barrel, dropping 1.38% on the day – up roughly 4% on the week. Markets were encouraged by reports that Washington and Tehran will press ahead with technical and peace talks despite intermittent military exchanges and an uncertain ceasefire. However, shipping through the Strait of Hormuz remains heavily disrupted, maintaining a risk premium in crude prices. The International Energy Agency warned that prolonged tensions could slow the replenishment of global oil inventories and unsettle the anticipated balance in the oil market.

Precious metals also softened, with gold declining 0.04% to trade at $4 119.48 per ounce, while silver fell 0.25%.

Asian equities closed mostly firmer on Friday, led by technology and semiconductor stocks as investors responded to Wall Street’s technology-led rally. South Korea’s SK Hynix made an impressive start to trading on the Nasdaq, echoing its strong US reception. Japan’s Nikkei ended the day 1.20% higher, while the Hang Seng closed with a 0.51% increase. In contrast, the Shanghai Composite dropped 0.81%.

The South African rand strengthened as the US dollar weakened broadly, with improving global risk sentiment providing support. Nonetheless, investor caution persisted amid ongoing geopolitical tensions, which continued to weigh on overall market confidence. At the close of markets on Friday, the rand traded at R16.31 against the US dollar, approximately 0.07% firmer. The local bourse also ended the session higher, with the FTSE/JSE All Share Index gaining 0.79%, while the Financials Index advanced 1.12%.