United States
U.S. equity markets rallied on Friday, buoyed by stronger-than-expected employment figures and renewed optimism that trade negotiations between the U.S. and China could soon begin. The S&P 500 jumped 1.47% (82 points) to close at 5,686, marking its ninth consecutive day of gains. The Dow Jones Industrial Average rose 1.39% to 41,373, while the Nasdaq Composite climbed 1.51% (267 points) to 17,977. All 11 sectors of the S&P 500 ended the day in positive territory, with communication services and financials leading the advance.
The U.S. labour market surprised to the upside, with non-farm payrolls increasing by 177,000 in April, beating economists’ expectations of 133,000. While the number represented a decline from March, it helped ease recession concerns. The unemployment rate remained steady at 4.2%.
US Non-Farm Payrolls – Monthly
In a further boost to sentiment, Chinese officials signalled they were “evaluating” a U.S. proposal to resume tariff negotiations, though they emphasised that Washington must “show sincerity” and be willing to “correct its wrong practices.”
Meta Platforms led gains in the communication services sector, jumping 4.34% to USD 597.02, as investors responded positively to stronger advertising revenue reported earlier in the week. Apple, however, fell 3.7% to USD 205.35 after quarterly earnings disappointed. While the full impact of tariffs has yet to materialise, Apple has mitigated disruption by sourcing iPhones outside of China.
Nvidia climbed 2.59% to USD 114.50 after reports emerged that the company is modifying its AI chip designs to comply with new U.S. export restrictions, allowing continued sales to China. Atlassian slumped 8.99% after issuing weak guidance for the next quarter, despite posting stronger-than-expected results for Q3.
The banking sector outperformed, with the financials sub-index rising 2.53%. Citigroup added 3.60%, and JPMorgan Chase rose 2.28%. In contrast, payments company Block plunged 20.43% after delivering disappointing results and cutting guidance for the next quarter. The company cited reduced activity on its Cash App and sluggish volume on its Square platform.
Over the weekend, Warren Buffett announced at Berkshire Hathaway’s annual meeting that he plans to step down as CEO and recommended Greg Abel as his successor. The conglomerate reported a 14% decline in operating earnings, attributed to wildfire-related insurance claims and a weaker U.S. dollar. Buffett warned that future earnings may be pressured by ongoing tariff tensions and broader geopolitical risks.
U.S. bond yields moved higher following the jobs report. The 10-year Treasury yield rose 9 basis points to 4.31%, while the 2-year climbed 12 basis points to 3.82%. The stronger data led traders to conclude that the Federal Reserve may delay rate cuts while assessing the economic impact of tariffs. Meanwhile, the Bloomberg U.S. Dollar Index fell 0.45%. On Wednesday the US Federal Reserve’s FOMC committee for an interest rate decision, it is widely expected that there will be no change in rates, however the commentary around the decision will be widely analysed for next moves and how the Fed is thinking in the current market.
Europe
Further signs of easing tensions in the U.S.–China trade dispute saw European investors continue to support the rebound in equities. The Euro Stoxx 600 ended the week 1.7% higher, gaining 8.83 points to close at 536.43. Markets opened stronger on renewed trade optimism and were further buoyed by stable U.S. employment data. Ten of the eleven sectors in the pan-European index closed in positive territory, with technology and industrials leading the gains.
Optimism was also evident in the UK, where the FTSE 100 added 1.2% to close at 8,596.35—surpassing the level it was at before the U.S. administration announced new tariffs in early April. The close marked a record 15th consecutive day of gains for the index. Germany’s DAX outperformed, surging 2.62%, as all major regional indices closed higher.
Positive corporate earnings further lifted sentiment. Airbus beat quarterly estimates and reaffirmed its guidance. The CEO called for a return to zero tariffs and noted that retaliatory tariffs from Europe had not significantly impacted the business so far, though the company remains cautious. Airbus shares jumped 5.3%, leading gains in the industrial sector. Schneider Electric rose 5.68%, continuing its recovery from the tariff-induced sell-off in April.
The banking sector also advanced. NatWest reported 36% earnings beat driven by stronger margins and higher loan balances, lifting its share price by 1.30%. Dutch lender ING gained 7.38% after announcing better-than-expected results and a €2 billion share buyback.
Shell shares climbed 2.05% after it also posted stronger-than-expected earnings and announced a buyback, despite falling oil prices. Reports over the weekend suggested Shell is working with advisers on a potential takeover of rival BP. With BP’s valuation significantly down in recent years, Shell is reportedly weighing the benefits of an acquisition versus further share repurchases.
Eurozone economic data was broadly supportive. Eurostat’s flash estimate for April showed inflation is expected to remain steady at 2.2%. The HCOB Eurozone Manufacturing PMI rose for the fourth consecutive month, reaching 49—the highest level in two and a half years. Services and composite PMIs are due for release on Tuesday.
Bond yields moved higher, with the German 10-year bund yield rising 9 basis points to 2.53%, while the UK 10-year gilt rose 3 basis points to 4.51%. The euro was little changed, with EUR/USD holding steady at 1.1298.
Australia
The result of the Australian election on Saturday has seen the Labor government returned with an increased majority, this result may provide investors with some comfort that the risk of a hung parliament—and the policy gridlock it could bring—has been avoided. Early commentary from Treasurer Jim Chalmers suggests a renewed focus on productivity improvements, which could support longer-term economic growth.
In overnight futures trading, the ASX 200 followed global equity gains to rise by 32 points, closing 0.39% higher on Saturday morning. The Australian dollar also opened the week on a stronger footing, with the AUD/USD trading at 0.6455.
On Friday, the Australian equity market rallied to a two-month high, gaining 92 points or 1.13% to close at 8,238. All 11 sectors of the index finished in positive territory, led by healthcare and energy. The rally was underpinned by a modest thaw in U.S.–China relations, with Chinese officials indicating they were open to discussions on trade.
Healthcare stocks, which had previously been pressured on tariff concerns, saw a notable rebound. CSL rose 2.11% to $256.41, while Telix Pharmaceuticals jumped 4.75% to $29.32. Energy stocks also outperformed, with Woodside gaining 2.03% to $20.61 and Santos adding 2.7% to $6.08.
Financials moved higher in anticipation of upcoming earnings releases from NAB, Westpac, and ANZ this week. Westpac, which reports today, rose 1.92% to $33.45, while ANZ added 2.08%. Investors will be closely watching net interest margins (NIM) and core profit growth, as mortgage competition continues to pressure bank earnings. Growth-focused Macquarie Bank rose 2.62% to $197.97.
In the tech sector, WiseTech Global advanced 0.67% to $95.00 following reports the company is in talks to acquire U.S.-based supply chain software provider E2open in a deal worth up to USD 3.5 billion. If completed, it would mark the largest acquisition in WiseTech’s history and could nearly double its current revenue base.
Australian bond yields followed global rates higher. The 10-year yield rose 5 basis points to 4.21%, while the 2-year yield edged up 1 basis point to 3.83%. The coming week is light on domestic economic data, with the focus likely to remain on the market’s response to the federal election outcome and earnings results from the major banks.
Commodities
Oil prices extended their decline on Friday, capping off the week at a four-year low. West Texas Intermediate (WTI) dropped 1.60% to US$58.29, falling US$1.60 on the day and losing 8% over the week. Brent crude was down 1.35%, settling at US$61.29. Caution prevailed among traders ahead of an OPEC+ meeting, which was brought forward to Saturday. That caution proved warranted as OPEC+ announced a second consecutive monthly increase in production for June.
The decision to ramp up output despite falling prices came amid reports that Saudi Arabia was unwilling to continue supporting the market through supply cuts. Frustration has reportedly grown within the bloc over a lack of compliance by other OPEC+ members with previous production curbs, undermining coordinated efforts to stabilise prices.
Gold ended the week slightly higher at US$3,240, up 0.04% on Friday but down 2.6% for the week, as the metal continued to consolidate following recent record highs. Silver also lost ground, falling 1.24% to close at US$32.01.
Bitcoin ended weekend trade at US$95,732, down 0.75% from Thursday’s close. The cryptocurrency had briefly climbed above US$97,000 on Friday before retreating, as momentum faded.
Industrial metals rallied after Chinese officials announced they were “evaluating” a U.S. proposal for tariff negotiations. Copper gained 1.7%, settling at US$9,365 per tonne on the London Metal Exchange. Nickel and aluminium also finished higher on the day. Iron ore added US$1.05 to close at US$96.25 in New York trade, supported by optimism around potential trade breakthroughs.
Economic Calendar
AU:
- Melbourne Institute Inflation Guage (Apr) – 11:00am
- ANZ-Indeed Job Advertisements (Apr) – 11:30am
US:
- ISM Services Index (Apr) – 12:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
