Tech rallies, but energy risks keep markets in check

Market Commentary

US equities notched fresh records on Friday, with the S&P 500 and Nasdaq Composite buoyed by prospects of US-Iran peace talks. The S&P 500 rose 0.80% to 7 165 and the Nasdaq climbed 1.60% to 24 837, while the Dow Jones bucked the trend, easing 0.20%. For the week, the S&P 500 gained 0.60% and the Nasdaq 1.50%. The Dow fell 0.40%.

President Donald Trump boosted sentiment further by extending the Israel-Lebanon ceasefire by three weeks. Reports of Iran's foreign minister meeting Pakistani mediators in Islamabad fuelled hopes of resumed US negotiations. 

Tech stocks led gains: Intel rocketed 23% to a record high after robust results and upgraded full-year profit guidance. Nvidia climbed over 4%, Amazon rose more than 3% and Palantir added 1.10%. Procter & Gamble gained 1.60% having exceeded sales expectations and reaffirmed its annual outlook.

European stocks edged lower as elevated energy prices continued to weigh on sentiment despite stronger technology earnings. The Eurozone STOXX 50 fell 0.30% to 5 885, while the STOXX 600 declined 0.60% to 611, both marking a fifth consecutive session of losses. Disruptions to shipping through the Strait of Hormuz and the ongoing US-Iran blockade kept pressure on energy supply and rate expectations. Industrials lagged, with Safran and Rheinmetall sliding, as did Eni on weaker earnings. SAP rose following strong results.

London’s FTSE 100 fell more than 0.50% to a two-week low, marking a fifth consecutive decline. Mondi dropped sharply after warning of rising cost pressures linked to the Middle East conflict, while AstraZeneca and GSK declined ahead of earnings. Banks also weakened ahead of results. Some support came from defensive names, with Unilever and British American Tobacco rising, alongside modest gains in oil majors. 

In Asia, business sentiment weakened further in the second quarter, with declines concentrated in accommodation, food services and construction. China saw foreign direct investment drop 7.30% year-on-year in the first quarter, although high-tech sectors and new enterprise formation showed areas of resilience. Markets were mixed: Japan's Nikkei edged up nearly 1%, Hong Kong's Hang Seng rose 0.26%, while Shanghai slipped 0.32%.

In South Africa, the 10-year government bond yield rose above 8.65%, its highest level in over two weeks, as global uncertainty and energy disruptions weighed on risk appetite. Inflation edged up to 3.10% in March, with policymakers highlighting the risk of further price pressures.

The JSE ALSI closed 0.10% higher at 116 565.97, joined by Top 40, Resource 10 and Industrial 25. The rand strengthened to R16.51 against the dollar and advanced relative to the pound and euro.

Commodity markets remained volatile. WTI crude futures dipped to $94.70 per barrel, ending a four-day rally, while Brent eased to around $105 per barrel despite prior surges still poised for a firm weekly gain. Gold closed at $4 719.94 per ounce and silver at $76.32, rebounding daily but headed for weekly losses amid evolving US-Iran talks and energy inflation concerns. Platinum fell to $2 026.55 per ounce.