Global markets retreat amid tech weakness, central bank caution, and trade uncertainty

US stocks fell on Thursday as weakness in technology and communication services weighed on the market. The S&P 500 lost 1%, the Nasdaq dropped 1.40%, and the Dow slipped 0.30% after giving up earlier gains. Meta slumped more than 11% after reporting a nearly $16 billion one-time tax charge and warning of sharply higher capital spending to expand AI and data centre capacity, dampening investor sentiment. Microsoft declined 2.60% despite strong cloud growth, as markets focused on its $3.1 billion charge tied to OpenAI and record quarterly capital expenditure of roughly $35 billion, reinforcing broader concerns over rising AI-related costs. Overall sentiment was further pressured by renewed caution over interest rates following the Federal Reserve’s more hawkish tone on inflation.

European equities also edged lower, as investors weighed central bank decisions, corporate earnings, and mixed economic data. The European Central Bank kept rates unchanged for a third consecutive meeting, citing a broadly stable inflation outlook, while the US Federal Reserve cut rates again but signalled that further easing in December was not guaranteed. On the data front, Eurozone GDP expanded 0.20% in the third quarter, exceeding expectations, though growth was uneven across major economies — with France and Spain posting solid gains, while Germany and Italy stagnated. Both the STOXX 50 and STOXX 600 closed 0.20% lower.

In Asia, Chinese shares retreated from 10-year highs as investor optimism over the Donald Trump–Xi Jinping meeting gave way to caution. The Shanghai Composite fell 0.73%, while the Shenzhen Component dropped 1.16%. Trump announced a deal to reduce tariffs in exchange for China pausing rare-earth export curbs, resuming US soybean purchases, and tightening oversight of fentanyl trade. After markets closed, China’s Ministry of Commerce confirmed the agreement, noting that it would suspend countermeasures on US ships and work to resolve the TikTok issue. Despite these steps, analysts said the outcome remains a tactical pause rather than a structural breakthrough, with key issues such as tech export controls and licensing still unresolved.

South African equities also edged lower, with the Top 40 index down around 0.60% as investors weighed a mix of domestic and global factors. The rand held near R17 to the US dollar, supporting exporters, but sentiment was tempered by mixed local data: inflation ticked slightly higher to 3.40% in September, industrial output contracted, and investment remained weak, even as consumer spending showed modest gains. Globally, uncertainty over US interest-rate policy and trade tensions kept risk appetite in check. Export-oriented stocks outperformed, while cyclical and interest-rate-sensitive sectors lagged.

Commodities had a mixed session on Thursday. Oil prices were largely unchanged, with Brent crude holding near $65 per barrel and WTI around $60.57, as markets balanced cautious demand outlooks against supply considerations. Gold, by contrast, rallied sharply, climbing about 1.90% to $4 003.62 an ounce, supported by safe-haven demand following the Federal Reserve’s rate cut and ongoing trade uncertainties. Overall, investors appeared to favour precious metals for protection amid global market caution, while energy markets remained subdued.