United States
Wall Street edged higher overnight, with the S&P 500 setting a fresh record as investors balanced upbeat corporate signals with ongoing uncertainty surrounding tariffs and monetary policy. The S&P 500 gained 0.3%, nearing the 6,300 mark, while the Dow Jones Industrial Average climbed 0.4%. The Nasdaq 100 dipped slightly by 0.2%, dragged by rotation out of recent tech leaders.
Earnings optimism lifted sentiment, led by Delta Air Lines which reinstated its full-year profit outlook, suggesting resilience in the US consumer. Tesla surged on plans to expand its Robotaxi service, and Nvidia briefly surpassed a US$4 trillion market cap, with President Trump later claiming credit on social media. Notably, Nvidia’s CEO is expected to meet Trump ahead of a planned trip to China, fuelling speculation around trade and AI investment.
US Treasuries were relatively steady after a well-received US$22 billion 30-year bond auction, which was awarded at 4.889%. The 10-year yield inched up one basis point to 4.34%, while the 30-year yield held near 4.86%. Jobless claims eased but were taken in stride, and the US dollar remained mostly flat.
Federal Reserve officials remained divided. While some, like San Francisco Fed President Mary Daly, still foresee two rate cuts this year, others are more cautious given inflation risks and the uncertain impact of tariffs. Futures markets continue to price in two cuts in 2024. Analysts warn that without tariff clarity by the extended 1 August deadline, July rate cuts appear unlikely.
Sector rotation continued, with energy leading gains in July after a weak first half. Conversely, communication services underperformed, reversing earlier strength. Strategists flagged a potential window of volatility from late July, citing elevated bullish sentiment, seasonal headwinds, and ongoing policy uncertainty.
Europe
European shares posted their fourth straight gain, with the Stoxx Europe 600 rising 0.5%, bolstered by strength in cyclical sectors and renewed optimism around Chinese stimulus. The Basic Resources Index jumped 3.2% to lead the region, as iron ore prices climbed amid hopes that Beijing’s push to reduce industrial overcapacity would support construction and infrastructure demand.
The UK’s FTSE 100 advanced 1% to a new all-time high, with commodity-linked names and industrials offsetting concerns over fresh US tariffs. Despite President Trump’s move to impose a 50% tariff on copper imports from 1 August, investor appetite for mining and materials stocks remained strong, reflecting confidence in the underlying demand outlook, particularly from Asia.
Autos and healthcare also contributed to gains across the continent, with German automaker BMW rising 4.1% after a bullish pre-close update that analysts at Bernstein called “reassuring.” In contrast, insurance and utility stocks lagged as investors rotated into higher-beta exposures. Swiss cocoa producer Barry Callebaut plunged 13% after slashing its sales volume forecast for the second time this year, citing continued volatility in cocoa bean prices.
Sentiment across Europe benefited from easing concerns about the broader impact of US trade policy, with many investors interpreting recent tariff announcements as negotiating tactics. A UBS basket of China-exposed European equities climbed 2%, led by strong performances in consumer discretionary and materials. Analysts noted that with European stocks still trading below their March highs, renewed interest in risk assets could drive further upside.
Australia
The Australian sharemarket tracked Wall Street higher, with the S&P/ASX 200 rising 0.6% or 50.6 points to 8,589.2 — just short of last week’s record close. The local bourse was boosted by gains in seven of the eleven major sectors, with miners, banks, industrials and real estate leading the charge on improved global risk appetite and stronger commodity prices.
Mining stocks were standouts as iron ore climbed 2.8% to US$98.80 per tonne, buoyed by data from the China Construction Machinery Association showing a 23% year-on-year surge in domestic excavator sales. The figures were seen as a sign of improving construction activity in China, providing a tailwind for Australian exporters. BHP rose 1.2%, Rio Tinto added 1%, and Fortescue jumped 1.9% in response.
Gold miners also advanced after spot gold rose 0.3% to US$3,324.63 per ounce. Evolution climbed 3.6%, Newmont added 3.2%, and Perseus rose 3.2% as investors returned to safe-haven assets amid lingering policy uncertainty. The rebound followed Wednesday’s pullback and came despite modest strength in the Australian dollar.
Copper-related stocks lagged, weighed down by news that US tariffs on copper would rise to 50% from next month. Sandfire Resources slipped 0.7%, Capstone Copper fell 1.4%, and Aeris Resources declined 2.6% to 19¢.
Bank stocks also provided support to the index. Commonwealth Bank rose 0.8% to $180.37, National Australia Bank gained 1.2%, ANZ rose 0.8%, and Westpac added 0.5%, recovering from recent weakness. Real estate stocks found renewed interest following the RBA’s decision to hold interest rates steady. Charter Hall climbed 1.5% and GPT added 1.4%.
In corporate news, Lovisa surged 5.1% after Morgan Stanley lifted its price target. Platinum Asset Management jumped 13.1% following favourable commentary from Morningstar and UBS. On the downside, Imricor Medical fell 15.1% on delayed US regulatory approvals, while Telix Pharmaceuticals retreated 3.6% after a valuation downgrade.
Commodities
Commodities saw mixed performance, though overall sentiment remained constructive for resource-focused investors. Brent crude slipped 1.9% to US$68.89 a barrel, and WTI fell 2.2% to US$66.88, as concerns over global demand and rising inventories resurfaced. Nonetheless, analysts noted that the broader energy complex remains resilient, buoyed by seasonal consumption and geopolitical uncertainties.
Iron ore was the top gainer, rising 2.8% on renewed Chinese infrastructure optimism. Copper rebounded 2.5% to US$5.6245 per pound despite tariff threats, suggesting market participants are pricing in continued demand from electric vehicle and clean energy sectors. However, gains in copper were not mirrored by Australian producers, who remained under pressure from geopolitical risk.
Gold edged higher by 0.3% to US$3,324.63 an ounce, as investors sought protection against macro uncertainty and as expectations for US rate cuts remained in play. The rally supported gains in ASX-listed gold producers and was further amplified by a weaker US dollar.
The Australian dollar gained 0.8% to US65.89¢, supported by rising commodity prices and firm equity market sentiment. In digital assets, Bitcoin advanced 2.4% to US$113,558, while Ether rose 2.9% to US$2,817.59, continuing their upward momentum amid broader risk-on conditions.
Economic Calendar
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This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
