United States
U.S. investors returned from the long weekend with renewed optimism, buoyed by expectations that several trade deals may be concluded in the near term, alongside a stronger-than-expected reading on consumer confidence.
The upbeat sentiment drove a broad-based rally across U.S. equity markets. The S&P 500 jumped 118 points, or 2.05%, to close at 5,921, with all sectors finishing in positive territory. Consumer discretionary and technology stocks led the gains. The Dow Jones Industrial Average climbed 740 points, or 1.78%, to 42,343.65. However, the standout performer was the Nasdaq Composite, which surged 2.47% (+462 points) to 19,199.
On the economic front, a rise in consumer confidence reported by the Conference Board lifted market sentiment, outweighing a decline in capital goods orders — a sign that businesses may be hesitating on investment amid shifting policy conditions.
Technology stocks were particularly strong, with the “Magnificent Seven” index gaining 2.9%. Nvidia advanced 3.21% on reports it plans to export a cheaper version of its Blackwell chip to China, designed to comply with U.S. export restrictions. The company is also set to report earnings on Wednesday.
Tesla shares soared 6.94% to USD 362.89 after CEO Elon Musk indicated once more that he would step back from political activity to refocus on Tesla and X. Alphabet (Google) rose 2.59%, while Apple gained 2.43% to USD 200.21 despite lingering tariff threats related to iPhone production.
Recently listed AI cloud provider CoreWeave extended its impressive run, surging another 20.66% to USD 123.97 after announcing a high-profile appointment to its regulatory and public affairs division, boosting investor confidence.
Financials also participated in the rally, with Citigroup and Bank of America both up 3.26%. However, materials and energy stocks lagged, posting more modest gains.
In fixed income markets, bond yields eased as investor caution subsided. The U.S. 10-year Treasury yield fell 6 basis points to 4.44%, while the 2-year yield declined 2 basis points to 3.98%.
The U.S. dollar strengthened, rising 0.50% from Friday’s 18-month low. Investors now turn their attention to core inflation data due later this week, which may offer further insight into the Federal Reserve’s future policy direction.
Europe
Shares in both Europe and the UK moved higher on Tuesday, with UK markets playing catch-up following Monday’s public holiday. The FTSE 100 rose 0.69% to close at 8,778, while the Euro Stoxx 600 edged up 0.33% to 552.32.
Investor sentiment was influenced by developments in U.S. policy on European Union tariffs and the growing possibility of tougher sanctions on Russia. These geopolitical tensions, particularly regarding the ongoing conflict in Ukraine, continue to shape market expectations, with many investors anticipating that a ceasefire remains a distant prospect.
In Germany, consumer confidence showed slight improvement, with the GfK Consumer Climate Indicator registering a modest uptick — a potential sign of stabilising domestic sentiment.
Sector-wise, technology stocks saw strong buying interest, mirroring gains in their U.S. counterparts. Industrials also outperformed, led once again by defence-related names as the deteriorating U.S.-Russia relationship keeps demand for defence assets elevated.
Gold miners underperformed as the price of gold pulled back from recent highs, weighing on the sector.
In bond markets, yields eased slightly. The German 10-year Bund yield fell 3 basis points to 2.53%, while UK 10-year gilt yields dipped to 4.66%.
Notably, the International Monetary Fund (IMF) revised its growth outlook for the UK slightly higher, the first upward revision for a while reflecting cautious optimism about the UK economic recovery.
Australia
The Australian equity market moved steadily higher throughout the day, closing at its session highs. The ASX 200 gained 46 points, or 0.56%, finishing at 8,407.60. Six of the eleven sectors advanced, with technology and financials leading the gains.
Technology shares were buoyed by WiseTech, which continued its upward momentum following the announcement of its bid for E2open, with its shares rising 2.21% to $107.07. Xero also climbed 1.45% to $183.57, supported by gains in Nasdaq futures that signalled higher global tech stock prices.
The financial sector had a strong day, adding 1.10%. Westpac rose 1.70%, while ANZ increased 1.40% to $29.06. ANZ’s new CEO, Nuno Matos, bolstered the executive team by bringing in a senior banker from Santander, adding further international expertise.
In healthcare, Fisher & Paykel advanced 2.37% to $34.12 ahead of its earnings release, with analysts expecting net income to reach NZ$360.3 million. ResMed also rose, gaining 1.98% to $38.13.
Gold miners retreated amid a softening gold price, with Evolution Mining falling 3.09% to $8.79. Conversely, copper miners climbed on speculation of increased corporate interest. Sandfire Resources rose 3.09% to $11.36, having surged 35% since early April lows and approaching all-time highs.
On the downside, REA led large-cap decliners, dropping 3.49% to $242.18. The company confirmed on Tuesday that the Australian Competition and Consumer Commission (ACCC) is investigating its subscription offerings. The probe reportedly concerns REA’s dominant market position and allegations of unfair price increases.
Today’s calendar highlights include the monthly Consumer Price Index (CPI) data, expected to show a 0.1% decline for the month, bringing the annual rate to 2.3%. In New Zealand, the Reserve Bank (RBNZ) is set to announce its interest rate decision, with economists anticipating a 25-basis point cut to 3.25%. In Australia, bond yields fell, with the 10-year yield down 7 basis points to 4.31% and the 2-year yield decreasing 4 basis points to 3.23%.
Overnight futures trading indicates the Australian market is set to extend its rally, with ASX futures up 48 points, or 0.57%. Meanwhile, the Australian dollar weakened against a rebounding U.S. dollar, with the AUD/USD pair starting the day at 0.6442.
Commodities
Commodity markets were largely subdued on Tuesday, with caution dominating sentiment across key sectors.
Oil prices edged lower, with both WTI and Brent contracts falling by approximately 0.75%. West Texas Intermediate (WTI) declined 0.73% to US$61.08. Traders remained cautious amid speculation of potential OPEC+ output increases and signs of progress in negotiations between the U.S. and Iran, both of which could affect future supply dynamics.
Gold fell for a second consecutive session, retreating 1.2% to US$3,300 per ounce. The pullback follows a sharp 5% rally last week, as risk assets have regained favour in the past 24 hours. A strengthening U.S. dollar also weighed on gold demand. Investors are now looking to the upcoming FOMC meeting minutes, due Wednesday, for insight into the Federal Reserve’s stance on interest rates and any signs of policy shifts that could influence safe-haven demand. Silver also eased, falling 0.68% to US$33.26.
Bitcoin remained elevated, trading near recent highs at US$109,720.
In industrial metals, iron ore continued its decline on concerns about slowing Chinese economic growth. Prices fell another 90 cents to US$95.90 per tonne, down 0.82% over the last 24 hours. The weakness extended to copper, with prices in the UK slipping 0.10% to US$9,596.50 per tonne. The sell-off was more pronounced in the U.S., where COMEX copper dropped 2%.
Economic Calendar
AU:
- Monthly CPI (Apr) – 11.30am
NZ:
- RBNZ Interest Rate Decision – 2.30pm
Europe:
- ECB Consumer Inflation Expectations (Apr) – 6:00pm
US:
- Richmond Fed Manufacturing Index (May) – 12:00am
- Federal Reserve Meeting Minutes – 4:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
