United States
US equity markets advanced mid-week, continuing their recent pattern of daily swings as they consolidate gains from the recent uptrend. An announcement from White House officials that Apple will invest an additional $100 billion in domestic manufacturing to bring more of its supply chain onshore sent Apple shares up 5.09% and helped lift broader indices.
The Dow Jones Industrial Average posted the smallest gain, rising 81 points (+0.18%) to close at 44,193. The Nasdaq Composite led the charge, climbing 1.21% (+252 points) to finish at 21,169, while the S&P 500 added 46 points (+0.73%) to settle at 6,345. Sector performance was mixed, with six sectors finishing higher and five lower. Consumer-focused sectors led the gains, with Consumer Discretionary up 2.51% and Consumer Staples gaining 1.74%.
Apple’s latest commitment brings its total announced US investment since February to $600 billion. Analysts described the surge as a “relief rally,” with one noting CEO Tim Cook’s decision as “a savvy solution to the President’s demand that Apple manufacture all iPhones in the US.” The announcement reignited interest in technology stocks, with Meta rising 1.12% and Alphabet up 0.82%.
The Consumer Discretionary sector also benefited from strong moves in Amazon (+4.00%) and eBay (+1.38%). Amazon gained after receiving regulatory approval for its Zoox robotaxi unit and announcing a new partnership with OpenAI, integrating the AI firm’s technology via Amazon Web Services (AWS).
McDonald’s advanced 2.98% after releasing second-quarter results that exceeded investor expectations, driven by stronger US sales through promotional campaigns. However, executives expressed ongoing concerns about the spending capacity of lower-income consumers.
Retailers also performed well ahead of upcoming earnings results. Walmart rose 4.08% and Costco gained 2.64% after reporting a 6.5% year-on-year increase in same-store sales for July.
In the bond market, the yield curve steepened following a weak 10-year Treasury auction. The 10-year yield rose 3 basis points to 4.23%, while the 2-year yield declined 1 basis points to 3.71%. Investors now turn to Thursday’s 30-year Treasury auction, with the benchmark yield last quoted at 4.82%.
Markets will closely watch weekly jobless claims due later today, especially after last week’s disappointing jobs report reignited calls for interest rate cuts. Also on the radar are inflation expectations from the New York Federal Reserve.
Europe
European markets were largely flat on Wednesday, with the Euro Stoxx 600 slipping 0.06% to close at 541.07. In contrast, the UK’s FTSE 100 edged higher, gaining 0.24% to finish at 9,164, as investors positioned themselves ahead of the Bank of England’s interest rate decision on Thursday, where a rate cut is widely anticipated.
Healthcare stocks led the declines across the region, falling 2.8%, as markets began to price in the impact of a proposed US “small tariff” on pharmaceuticals, set to escalate over the next 18 months. Novo Nordisk dropped 5.36% after reporting slower sales growth, attributing the weakness to increased competition from generic versions of its weight-loss drug Wegovy.
Bayer shares slumped 9.92% after further details from last week’s preliminary earnings revealed that the company’s second-quarter revenue boost was largely driven by its Bayer Leverkusen football team, which benefited from lucrative player transfers—rather than improvements in its core pharmaceutical and crop protection business. The revelation disappointed investors and sparked a sharp selloff.
Glencore also weighed on the broader index, declining 5.4% after reporting lower first-half earnings. The mining and commodities giant confirmed it will maintain its listing in the UK, ruling out a potential US listing.
In the bond market, yields edged higher, the German 10-year yield rose 3 basis points to 2.65%, while the UK 10-year gilt added 1 basis point to 4.52% in quiet trade as traders awaited the Bank of England’s interest rate decision.
Australia
The Australian equity market extended its record-breaking run for a second consecutive day, rising by 73 points (+0.84%) to close at 8,843.70. The rally was driven by strong corporate earnings as the reporting season got underway. It was a broad-based advance, with 10 of the 11 sectors finishing in positive territory. The strongest performers were Energy, Materials, and Financials, while Utilities was the only sector to post a loss, slipping just 0.06%.
A rebound in oil prices prompted renewed interest in the energy sector. Coal miners were among the beneficiaries, with Yancoal climbing 2.53% and Whitehaven up 1.97%. Woodside Energy extended its recent gains, rising 34 cents (+1.28%) to finish at $26.90.
REA Group delivered a strong earnings result, reporting a 23% increase in net profit to $564 million and announcing a dividend increase to $1.38 per share. The result was well received by investors, sending the stock up $16.25 (+6.94%) to close at $254.50. Outgoing CEO Owen Wilson stated he was not concerned about the ACCC’s investigation into the company’s pricing practices, adding that the company remains confident in its guidance for double-digit growth.
In the Financials sector, Pinnacle Investment Management reported a 49% increase in full-year net income and provided upbeat forward guidance, with funds under management and net flows exceeding expectations. The stock surged 9.47% to $25.21. The banks also continued their positive momentum from the previous session, with all major lenders finishing higher. Commonwealth Bank led the gains, rising 0.98% to $179.08.
The Materials sector advanced 1.28% despite softer iron ore prices, as major miners rallied. Gold stocks were also in favour, supported by a stabilisation in the gold price near recent highs. Evolution Mining rose 1.91%, while Northern Star continued its four-day recovery, jumping 4.96% to $17.13.
Meanwhile, bond yields edged higher across the curve, with both the 2-year and 10-year yields up 3 basis points, to 3.34% and 4.25% respectively.
In overnight trading, recent gains in the Australian equity market were partially unwound, with ASX 200 futures falling 27 points (-0.30%), indicating a softer start to the session. Meanwhile, the Australian dollar begins the day on a firmer note, trading at 0.6505 against the US dollar.
Commodities
Oil prices fell for a fifth consecutive session on Wednesday in volatile trade. During Asian and early European hours, crude attempted a rebound following its recent decline. However, comments from President Trump suggesting progress in negotiations with Russia over Ukraine introduced uncertainty around the potential imposition of secondary oil tariffs. This renewed focus on supply concerns and pushed oil prices lower.
West Texas Intermediate (WTI) dropped US$0.81 (-1.24%) to settle at US$64.35, while Brent crude declined 1.17% to US$66.85.
Iron ore prices remained stable, closing at US$101.80 in New York, up US$0.05 in a session characterised by tight-range trading. Copper edged higher, gaining 0.40% (US$38) to finish at US$9,676 per tonne on the LME.
Gold came under pressure from profit-taking, falling US$11.27 (-0.33%) to US$3,369 per ounce, while silver was unchanged at US$37.83.
Economic Calendar
AU:
- Trade Balance (Jun) – 11.30am
China:
- Trade Balance (Jun) – 1:00pm
UK:
- UK Bank of England Interest rate Decision – 9:00pm
US:
- Non-farm Productivity (Q2) – 10:30pm
- Unit Labour Costs (Q2) -10:30pm
- Weekly Jobless Claims – 10:30pm
- NY Fed 1 year Inflation Expectations (Jul) – 1:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
