Oil volatility drives mixed global markets

Market Commentary

Brent crude ended a volatile session lower by more than 2% on Thursday after briefly surging as much as 3%, as markets whipsawed on shifting signals around US–Iran negotiations. Sentiment swung on comments from US Secretary of State Marco Rubio, who pointed to “some encouraging signs” of a potential agreement, alongside reports that Pakistani mediators may travel to Tehran as it reviews Washington’s latest proposal.

However, the tone remained fragile after earlier reports that Iran’s Supreme Leader had instructed that near-weapons-grade uranium should not be sent abroad, reinforcing Tehran’s hardline stance. Despite the pullback, oil remains roughly 50% above pre-conflict levels, with supply dynamics further complicated by a record US Strategic Petroleum Reserve withdrawal of nearly 10 million barrels last week. The intraday reversal in crude set the broader tone for global markets, driving alternating risk-on and risk-off moves across asset classes.

US equities ultimately settled higher after a choppy session, as easing geopolitical fears and the pullback in oil prices supported sentiment. The Dow Jones rose 276 points to a fresh record, while the S&P 500 added 0.20% and the Nasdaq gained 0.10%. Sentiment was buoyed by reports suggesting Iran saw the latest US proposal as narrowing differences, reinforcing hopes of a diplomatic path forward and helping extend oil’s recent decline, which in turn underpinned equity resilience.

In Europe, equities finished mixed as investors balanced geopolitical uncertainty against weakening regional growth signals. The STOXX 600 rose 0.20% while the STOXX 50 was broadly flat, with sentiment oscillating alongside crude oil’s volatility. Although earlier optimism around diplomacy had pressured oil lower, prices rebounded intraday before easing again, contributing to firmer sovereign yields and keeping inflation concerns in focus amid softer Eurozone data.

Chinese equities fell sharply, with the Shanghai Composite down 2.04% and the Shenzhen Component off 2.07%, as profit-taking hit technology stocks after the recent AI-led rally driven by strong NVIDIA earnings. The decline came despite intermittent geopolitical relief, including comments from US President Donald Trump that negotiations with Iran were in their “final stages,” which briefly eased inflation fears linked to energy markets. Separately, reports that Xi Jinping may visit North Korea as early as next week highlighted improving regional diplomatic alignment, though it did little to offset equity pressure.

South African equities edged lower, with the FTSE/JSE All Share Index down 0.51% to 114 053 points as investors locked in gains after global risk sentiment softened. Resource shares underperformed alongside stabilising commodity prices, weighing on counters such as Anglo American and Sibanye-Stillwater, while financials offered relative support with banks including Absa Group, Nedbank Group and Investec benefiting from steady valuation sentiment. The rand remained stable and 10-year bond yields hovered near 9%, leaving local equities sensitive to both global rate expectations and shifting risk appetite.