US equities hold firm amidst trade talks

US equities traded flat to slightly higher near record levels on Monday, as investors braced for a week filled with geopolitical developments and crucial economic data. According to Trading Economics, Financial Times reported that Nvidia and AMD have agreed to share 15% of their revenue from chip sales to China with the US government, in exchange for export licences. Nvidia shares slipped 0.90%, while AMD declined by nearly 1.60%. Investor focus also remained on ongoing US–China trade negotiations, with expectations leaning towards a 90-day extension to allow further dialogue.

Locally, the South African rand weakened on Monday, as upbeat domestic manufacturing data failed to outweigh persistent trade-related concerns. The country is currently seeking to secure a lower tariff rate on its exports to the United States. By 12h35 GMT, the rand was trading at 17.7825 against the US dollar, approximately 0.2% weaker than Friday’s close. Data released by the national statistics agency showed that South Africa’s manufacturing output rose by 1.90% year-on-year in June, following a revised 0.70% increase in May. The Johannesburg Stock Exchange’s Top-40 index was last down 0.50%.

In the UK, the FTSE 100 advanced on Monday, snapping a two-day losing streak, buoyed by gains in financial and consumer staple shares. HSBC rose 1%, Barclays gained over 0.50%, AstraZeneca climbed 1.20%, and British American Tobacco rose more than 2%, with GSK and Rio Tinto also notching gains. Globally, trade remained a key focus as the 90-day US–China tariff truce approached its expiry. The agreement had previously lowered reciprocal tariffs from 125% to 10%, although the US maintained a 20% duty on fentanyl imports.

Across Europe, markets opened higher but soon surrendered gains to close marginally lower, as caution prevailed ahead of potential trade and geopolitical risks. The STOXX 50 dipped 0.30% to 5 330, while the broader STOXX 600 edged down to 547. With the current US–China trade truce set to expire tomorrow, uncertainty lingers over whether an extension will be granted or if tensions are poised to escalate.

In Asia, Japanese equities surged on Friday, with the Nikkei 225 climbing 1.85% to close at 41 820, and the broader Topix Index rising 1.21% to 3 024 - an all-time high - driven by strong corporate earnings. SoftBank Group soared over 10% after returning to profitability in the first quarter, bolstered in part by gains linked to its investments in artificial intelligence.

Meanwhile, Chinese markets extended their recent rally. The Shanghai Composite rose 0.34% to close at 3 648, while the Shenzhen Component gained 1.46% to 11 291. Reports suggest that China is pushing for US concessions on export controls related to AI chips as part of the broader trade negotiations - potentially ahead of a summit between Presidents Xi Jinping and Donald Trump.

In commodities, WTI crude oil futures hovered around $64 per barrel on Monday, following a sharp 5.1% drop last week - the largest weekly decline since late June - as President Trump’s renewed efforts to broker an end to the war in Ukraine eased concerns over supply disruptions from Russia. Meanwhile, gold prices slipped to around $3 345 per ounce, as diminishing geopolitical risks weighed on the precious metal’s safe-haven appeal.