United States
Wall Street wrapped up a volatile month with a late-session rebound, as investors looked past early losses and weak economic data in favour of renewed hopes for a Federal Reserve rate cut and improving trade relations with China. The S&P 500 erased a 2% drop to finish marginally higher, marking the first such turnaround since 2022. The index gained 0.1%, the Dow Jones added 0.3%, while the Nasdaq 100 rose 0.1%.
Sentiment firmed after reports that the US is quietly engaging China on trade, even as fresh data showed the economy contracted 0.3% on an annualised basis in Q1—the first decline since 2022. However, inflation cooled, with core PCE easing to 2.3%, bolstering the case for a mid-year Fed cut.
Microsoft and Meta lifted spirits in after-hours trade, each jumping more than 5% on stronger-than-expected earnings. Meanwhile, eBay offered a bullish forecast, though Qualcomm disappointed with a weaker revenue outlook. Investors also digested remarks from analysts suggesting that constructive trade announcements could trigger a more dovish Fed stance, while prolonged tariff uncertainty could risk stagflation.
In corporate news, Nvidia CEO Jensen Huang called for easing restrictions on AI technology exports. Caterpillar flagged softer sales if tariffs persist, and Ford held off on price increases pending clarity on costs. Meanwhile, Robinhood saw a surge in retail trading, offsetting slowing crypto revenue.
Bond yields edged lower, with the 10-year Treasury yield down two basis points to 4.15%. The US dollar steadied, while the Bloomberg Magnificent 7 Index fell 1.1%.
Europe
European equities extended their rally for a seventh straight session, buoyed by strong earnings despite mixed sectoral performances. The Stoxx Europe 600 rose 0.5%, led by telecoms and media, with Universal Music Group up 3.4% on growing subscriptions.
Glencore dragged miners lower, sliding 7.3% after weak copper output and a subdued outlook for its trading unit. Banks underperformed following disappointing results from Banco Santander, which fell 4.2%, while Societe Generale bucked the trend with a 3.8% gain on strong equities trading revenue.
The broader European market has recovered most losses from earlier in April after the US introduced limited tariff exemptions for automakers. Nonetheless, sentiment wavered early in the session after data confirmed the US economy shrank for the first time in two years.
German 10-year bund yields fell five basis points to 2.44%, while UK yields declined to 4.44%. Investors will be watching how European corporates navigate trade disruptions moving into the second half of the year.
Australia
The Australian sharemarket notched its first monthly gain since January, with the S&P/ASX 200 climbing 0.7% to 8,126.2. The index rose 3.6% in April and extended its daily winning streak to five sessions. Seven of the eleven sectors advanced, led by technology and financials. Meanwhile, the ASX is expected to open lower this morning, with ASX200 futures down -28 points or -0.34%.
Investors shrugged off soft US economic data, instead banking on the idea that lower inflation and slowing growth would prompt central banks to act. Commonwealth Bank rallied 2.2% to $166.60, edging back toward record highs, while TechnologyOne and WiseTech rose 2.5% and 1.1%, respectively.
Gains in rate-sensitive sectors were offset by weakness in miners. Gold stocks fell alongside the metal’s price, with Newmont down 1.7% and Evolution off 2%. Northern Star tumbled 3.5% after cutting its annual production forecast due to rising costs and royalty expenses.
Defensive stocks were out of favour, with Origin down 1.4% and Coles easing 0.8%, despite solid performance from its premium product lines. Ora Banda Mining dropped 6.1% on a downgrade to output expectations, while Alcoa lost 1.7% after power outages disrupted its Spanish operations.
ASX futures were down 0.2%, or 19 points, early Thursday, pointing to a potential pause in the local rally. VanEck’s Russell Chesler likened the market to a pendulum still swinging on tariff uncertainty.
Commodities
Commodities were weaker overnight, with oil prices logging their largest monthly loss in four years. West Texas Intermediate fell 3.6% to US$58.22 a barrel, while Brent crude dropped 1.8% to US$63.12. The decline reflected slowing global growth expectations and anticipation of higher supply from OPEC+.
Gold declined 0.8% to US$3,292.31 an ounce as safe-haven demand eased. Iron ore lost 1.5% to US$96.95 a tonne, while copper traded marginally higher on reports of stronger Chinese demand.
In currency markets, the Bloomberg Dollar Spot Index gained 0.1%. The euro and yen both fell 0.5%, while the British pound shed 0.6%. The Australian dollar edged up 0.3% to US$0.6403.
Cryptocurrencies were slightly lower, with Bitcoin down 0.5% to US$94,541 and Ether falling 0.8% to US$1,795.63.
Economic Calendar
US:
- Initial Jobless Claims 23:45 pm
- ISM Manufacturing (April) 00:00 am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
