Tech rally lifts global equities despite inflation and geopolitical risks

Market Commentary

US equities rose to fresh highs on Thursday as strong earnings momentum in technology stocks continued to offset concerns around elevated inflation, higher energy prices, and a hawkish Federal Reserve (Fed) outlook. The S&P 500 and Nasdaq each gained 0.50% to record highs, while the Dow Jones briefly moved above 50 000 as resilient retail sales and continued AI-related optimism supported sentiment.

US retail sales rose 0.50% in April, while the control group measure, which feeds directly into GDP calculations, also increased 0.50%, reinforcing signs of steady consumer demand despite renewed inflation pressures linked to the Middle East conflict and disruptions in the Persian Gulf. Investors continued to expect the Fed to keep interest rates unchanged through year-end, while markets priced in a 28% probability of a 25bps rate hike in December.

Technology shares remained the key driver of gains. Cisco surged 15% after strong earnings and guidance, while Nvidia added 2% after the US approved exports of H200 chips to selected Chinese firms during President Donald Trump’s visit to Beijing alongside major technology executives. The yield on the US 10-year Treasury note edged lower to 4.45% after reaching its highest level since July 2025 in the previous session.

European equities also advanced sharply, extending the prior session’s rebound as easing trade rhetoric between the US and China supported technology shares. The Eurozone STOXX 50 rose 1.20% to 5 931, while the STOXX 600 gained 0.70% to 616. ASML climbed 5.50%, Infineon gained 3%, and Siemens added 2.60% following earnings.

The FTSE 100 edged higher but underperformed broader European peers as several heavyweight shares traded ex-dividend. National Grid gained more than 1%, while Burberry fell over 6%. UK GDP growth supported sentiment after the economy expanded 0.60% in 1Q26, while the pound weakened toward $1.35/pound amid rising political uncertainty surrounding Prime Minister Keir Starmer’s leadership.

Asian markets were mixed. The Shanghai Composite fell 1.52% to 4 178 and the Shenzhen Component dropped 2.14% as investors monitored developments from the Trump–Xi summit, while the Nikkei 225 declined 0.98% after profit-taking from recent record highs.

In South Africa, the rand held near R16.40 against the US dollar despite renewed political scrutiny surrounding President Cyril Ramaphosa. Mining production rose 2.50% year-on-year in March, slowing from February’s 9.70% increase as growth moderated across several mining categories.

Commodity markets remained volatile. Brent crude traded around $105 per barrel as markets monitored developments in the Strait of Hormuz, while gold steadied near $4 700 per ounce. Silver slipped to about $85 per ounce, while platinum climbed toward $2 200, reaching its highest level since March.