Markets diverge as Europe hits fresh peaks

Market Commentary

European stocks ended mixed for a second straight session on Friday, as investors weighed earnings reports and new inflation figures for clues on the European Central Bank's (ECB) rate path. The pan-European STOXX 600 rose 0.20% to a fresh record of 634, while the Eurozone STOXX 50 dropped 0.50% to 6 130. Germany's DAX 40 edged slightly lower before closing flat at 25 312, with traders parsing US and European inflation alongside corporate updates. London's FTSE 100 rose 0.70% to about 10 923, hitting a new high and sealing an eighth consecutive monthly advance, its longest streak since 2013 and strongest month since 2022, up roughly 6.80%.

US equities saw the S&P 500 dip 0.40%, the Nasdaq fall 0.40% and the Dow Jones decline by 1.10%, as elevated inflation data and a tech sector pullback dragged the major indices into negative territory. These figures hinted at companies passing on tariff costs to consumers, clouding prospects for Federal Reserve (Fed) rate cuts. Sentiment weakened further amid sweeping layoffs at Block and weak guidance from CoreWeave, which plunged 18.60%. Nvidia extended its decline with a 4.10% drop, fuelled by doubts over the long-term viability of hefty artificial intelligence (AI) capital spending by big tech. Dell bucked the trend, soaring 21.80% on surging AI server demand and a huge share buyback programme, though financial giants Apollo and Jefferies tumbled 8.60% to 9.30% among fears of private credit spillover. Despite the volatility, February brought record corporate buyback approvals totalling $233.3 billion, offering support to select large-cap stocks.

Asian markets closed unevenly on Friday, taking cues from hesitant Wall Street performance overnight. Tech shares tumbled, echoing Nasdaq weakness triggered by fears over inflated AI spending. Caution prevailed over persistent US tariff threats, US-Iran geopolitical strains, and anticipation of the forthcoming US producer price index data that could shape rate cut expectations.

The South African rand weakened on Friday to 15.96 against the US dollar by 16h01 SAST, down as investors weighed mixed month-end data from the central bank, revenue service and National Treasury. Reuters reported that the South African Reserve Bank figures showed M3 money supply growth easing to 7.44% in January 2026 from December's 8.16%, with private sector credit up 8.83% (just short of Reuters poll forecasts at 8.84%). The revenue service logged a robust January trade surplus of R9.31 billion ($584.73 million), well above the R4.45 billion expected, offsetting a Treasury-reported budget deficit of R69.69 billion ($4.38 billion) for the month. Equities fared better, with the JSE All Share Index closing 1.48% higher and the Resource 10 leaping 4.29%.

Commodities performed strongly, with silver surpassing $92 per ounce to near two-month highs and gold reaching one-month peaks of $5 278, closing in on its late-January record of $5 500, as investors flocked to safe havens amid geopolitical risks, trade tensions and sticky inflation. Brent crude futures advanced to around $73 per barrel at eight-month highs, spurred by shipping diversions from the Strait of Hormuz after US negotiators departed Geneva talks downbeat, even as Iran and Oman struck more optimistic notes. These moves leave silver, gold and oil primed for gains when trading resumes Sunday evening.