United States
A softer tone on tariffs from the US administration, combined with strong earnings results, helped US equity markets rally again on Friday. The S&P 500 rose 0.74%, adding 44 points to close at 5,525.21, marking its fourth consecutive day of gains. Five sectors within the index finished higher, with consumer discretionary and technology leading the advance, while materials lagged.
The Dow Jones Industrial Average posted only a modest gain of 0.05%, closing at 40,113.50, whereas the Nasdaq Composite outperformed, climbing 1.26% to 17,382, a 217-point increase.
Investor sentiment was supported by better-than-expected first-quarter earnings from Alphabet (Google). The company reported ongoing growth in its search and advertising businesses despite rising competition from AI providers. Alphabet shares finished the day up 1.47% at US$163.85.
Tesla surged 9.80% to US$284.95, gaining 18% for the week. Despite reporting weaker-than-expected sales earlier in the week, the stock rebounded strongly after news emerged that CEO Elon Musk would be stepping back from his commitments related to Dogecoin (DOGE), which reassured investors.
Other members of the “Magnificent Seven” also traded higher as the market looks ahead to a series of upcoming first-quarter earnings reports from Apple, Microsoft, Amazon, and Meta. On Friday, Amazon gained 1.31%, Microsoft rose 1.17%, and Nvidia jumped 4.30% to US$111.01, as investors saw the recent sell-off as a buying opportunity. A Morgan Stanley analyst commented that demand for AI chips remains robust, further supporting Nvidia’s share price. Both Nvidia and Amazon said late last week at the Hamm Institute conference in Oklahoma City that they are not seeing any significant drop in demand for AI data centres.
Meanwhile, the US Federal Reserve released its bi-annual Financial Stability Report on Friday, highlighting rising risks to the financial system. Key concerns cited included global trade tensions, policy uncertainty, and the sustainability of US government debt.
In the bond market, US Treasury yields fell as optimism grew around a potential easing of trade tensions. The yield on the 10-year Treasury dropped 8 basis points to 4.23%, while the 2-year yield declined 5 basis points to 3.75%.
Looking ahead, investor attention will turn to US GDP data due on Wednesday and various monthly jobs data reports culminating in no-farm payrolls due on Friday, May 2. These releases will provide further insight into whether recent declines in sentiment surveys are beginning to show up in the hard economic data.
Europe
European stocks advanced on Friday, marking a second consecutive week of gains. The Euro Stoxx 600 rose 0.35% to close at 520.45, up 1.84 points. Eight of the 11 sectors finished higher, with industrials leading the gains while communication services lagged.
The FTSE 100 posted a more modest increase, adding 0.09% to close at 8,415.25. The UK index has now risen for 10 straight sessions, supported by a more optimistic investor outlook regarding the ongoing China-US trade tensions.
Within the industrial sector, Siemens climbed 3.07% after receiving broker upgrades, with analysts at Citigroup highlighting that artificial intelligence-driven automation could position the company as a market leader. Construction stocks also performed well, with concrete maker Holcim and materials supplier Saint-Gobain reassuring investors through business updates that downplayed the potential impact of tariffs on their earnings. Holcim reported solid first-quarter results and reaffirmed its guidance for 2025, sending its shares up by 2.2%.
French jet engine manufacturer Safran surged 4.2% after posting strong first-quarter results. The company’s CEO noted that China would grant exemptions on certain aircraft components, including jet engines. The aerospace and defence sub-sector gained 1.80% on the day.
On the downside, communication services were the weakest sector, dragged lower by Deutsche Telekom, which fell 4.79%. The decline followed disappointing subscriber growth and higher-than-expected customer turnover reported by its subsidiary, T-Mobile.
Meanwhile, expectations for a further rate cut by the European Central Bank (ECB) in June are growing. Speaking at the IMF and World Bank Spring meetings in Washington, ECB policymakers indicated that growth is stalling, and wage pressures are easing. The ECB previously reduced rates to 2.25% in May and suggested that another 0.25% cut could follow in June, although the longer-term outlook for further policy moves remains uncertain.
In fixed income markets, Germany’s 10-year bond yield rose by 2 basis points to 2.46%, while UK 10-year bond yields fell by 2 basis points to 4.47%. The euro slipped slightly against the US dollar, with EUR/USD ending at 1.1365.
Australia
Australian markets were closed on Friday for the ANZAC Day holiday. In the previous session on Thursday, the ASX 200 rose 0.60%, adding 47.90 points to close at 7,968.20. Since then, ASX 200 futures have gained 83 points in 2 overnight trading sessions since then, up 1.03%. The AUD/USD starts the week at 0.6395.
Commodities
Oil prices edged higher on Friday, with the West Texas Intermediate (WTI) contract rising 0.37% to close at US$63.02, up 23 cents. Brent crude also gained 0.48%, finishing at US$66.87. The market was supported by news that China would exempt certain US-made pharmaceuticals from the 125% retaliatory tariffs it had imposed in response to US-led tariff increases. China also indicated it was considering removing tariffs on other products, though it denied that any formal negotiations on tariffs were underway — a direct contradiction to claims made by President Trump.
On the supply side, traders were focused on speculation that OPEC+ may consider further production increases at its June meeting. Hopes for progress toward a ceasefire between Ukraine and Russia also contributed to the market sentiment.
Gold prices fell in the calmer market environment, dropping 0.89% to US$3,319.72 per ounce — a decline of US$29.71. The precious metal had been down as much as 2% during the session before recovering some of the losses into the close. Silver also moved lower, falling 1.40% to US$33.11 per ounce.
Bitcoin continued its recent rally, gaining another 1.5% from Thursday’s close to finish the week at US$94,885. A report from Bitcoin investment firm CoinShares suggested that the total average cost to mine one Bitcoin, including non-cash expenses, jumped to US$137,018 in the final quarter of 2024. Excluding non-cash items, the production cost was estimated at around US$82,000.
Copper prices traded sideways, slipping US$18 to close at US$9,374 per tonne on the London Metal Exchange (LME). Notably, copper inventories in China posted their largest weekly decline on record, signalling strong demand within the country. Meanwhile, iron ore futures for Singapore delivery ended the week in New York at US$97.90, down 0.52%. The commodity had briefly pushed above the US$100 mark earlier in the week.
Economic Calendar
US:
- Dallas Fed Manufacturing Index (Apr) – 1:30am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
