United States
Wall Street ended the week mixed as earnings reports and shifting policy signals shaped investor sentiment. The S&P 500 hovered near its all-time high but finished flat, while the Nasdaq edged up 0.05% and the Dow Jones Industrial Average slipped 0.3%. A drop in bond yields followed dovish commentary from Federal Reserve Governor Christopher Waller, who reaffirmed his call for a July rate cut and warned that he may dissent if the Fed holds steady. Short-dated Treasury yields fell more sharply, with the 2-year yield down three basis points to 3.87%, while the 10-year yield eased to 4.43%.
Markets were buoyed by data showing a decline in consumer inflation expectations. The University of Michigan’s survey revealed one-year inflation expectations fell to 4.4%, the lowest in five months, with long-run expectations also easing. Consumer sentiment rose to a five-month high at 61.8, bolstered by signs of resilience in household spending and a rebound in retail sales.
Earnings were in sharp focus. Netflix beat expectations but its shares declined after a strong run, while 3M rose on an upgraded profit forecast. American Express, Interactive Brokers, and Charles Schwab posted solid results, while Chevron prevailed in its bid to acquire Hess. Conversely, Humana lost a key lawsuit, and Sarepta faced FDA scrutiny over its Elevidys treatment. Meanwhile, Trump’s push for broad-based tariffs on EU imports added an undercurrent of trade-related concern, with investors wary of potential disruptions.
Europe
European equities closed little changed on Friday, with the Stoxx Europe 600 Index finishing flat and down 0.1% for the week. Healthcare stocks weighed on the benchmark as GSK Plc fell 4.6% after its blood cancer drug Blenrep failed to secure support from US regulators. However, gains in the energy sector helped offset losses, driven by fresh EU sanctions on Russia, including an updated oil price cap.
Saab AB surged 16% after raising its revenue forecast on the back of strong second-quarter results, and Burberry gained 6% despite a drop in sales that was smaller than feared. Investor caution remained elevated amid ongoing US tariff negotiations, with the broader European index still 3% below its March peak.
Portfolio managers highlighted that many companies remain well-positioned to weather any tariff fallout. However, autos and suppliers remain a key area of concern, with some investors choosing to avoid the sector due to its exposure.
Australia
Futures point to a soft start for the ASX on Monday, with SPI contracts down 0.6% at 8688 following Wall Street’s mixed close. However, strong earnings, resilient commodity prices, and easing inflation fears may provide underlying support for local equities. Australian shares capped their best week since May with a strong rally on Friday, as the S&P/ASX 200 soared 1.4% to close at 8757.20 after hitting an intraday high of 8776.40. The index climbed 2.1% for the week, notching record closes on three separate days. All 11 sectors closed higher, led by healthcare, where CSL jumped 3.6% following bullish commentary from UBS. For the week, CSL added 7%, its best performance since 2021.
BHP lifted market sentiment with a 3% gain after posting record copper and iron ore output. CEO Mike Henry noted Chinese demand was holding firm, helping push iron ore to a three-month high at USD 100.90/tonne. The strength in materials, combined with renewed optimism for rate cuts after a rise in unemployment to 4.3%, has supported the local bourse.
Investors will look to Tuesday’s RBA meeting minutes and a Thursday speech by Governor Michele Bullock for clues on monetary policy, particularly after the central bank surprised markets by holding rates at 3.85%. Reporting season also kicks off, with AMP, Fortescue, Woodside, and Whitehaven due this week.
Commodities
Commodities were mixed. Gold rose 0.3% to USD 3349.94 per ounce as falling bond yields and lower inflation expectations boosted demand for safe havens. Oil prices edged lower, with Brent crude down 0.4% to USD 69.28 and WTI crude easing 0.2% to USD 67.38 amid ongoing supply uncertainty. Iron ore fell marginally to USD 100.90, though it remains near recent highs on strong Chinese steel demand.
In currencies, the Australian dollar rose 0.4% to US65.14¢, supported by improving local economic momentum. The US dollar eased slightly, with the Bloomberg Dollar Spot Index down 0.1%. Bitcoin slipped 1.9% to USD 117,828, while Ether gained 3.9% to USD 3,554.
Economic Calendar
US:
- Leading Index (Jun) 00:00
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
