United States
Wall Street ended mixed on Thursday, retreating from early session highs. The Dow Jones Industrial Average closed 224 points lower, falling 0.51% to 43,968. In contrast, the Nasdaq Composite gained 73 points (+0.35%) to finish at 21,242, while the S&P 500 slipped 5 points (-0.08%) to close at 6,340. Sector performance was also mixed, with five sectors advancing and six declining.
Early gains were reversed following a Bloomberg report indicating that the Trump administration is considering appointing Federal Reserve Governor Christopher Waller to succeed Jerome Powell as Chair once Powell’s term ends. Waller is perceived as more dovish—generally favouring lower interest rates—than other potential candidates.
Corporate earnings further dampened market sentiment. Eli Lilly fell 14.14% after reporting underwhelming late-stage trial results for its experimental obesity pill. Investors had high expectations that a pill-based solution would offer a more attractive alternative to the current weekly injection treatments. Caterpillar also declined 2.48%, as renewed focus on the negative impact of tariffs—announced the previous day—pressured its earnings outlook.
Meanwhile, the technology sector continued its ascent, with the “Magnificent 7” index closing at a new record high. Apple gained 3.18% following news of additional investment in the United States. Nvidia and Tesla each added 0.75%.
The new US tariff regime came into effect on Thursday, targeting imports from multiple countries. US Commerce Secretary Lutnick stated that the measures could generate $50 billion per month, with further tariffs expected in specific sectors, including pharmaceuticals and semiconductors.
In fixed income markets, bond yields were steady. The 10-year Treasury yield added 1 basis point to 4.24%, while the 30-year bond yield settled at 4.83% following a cautiously received auction.
Europe
European shares advanced on Thursday, buoyed by optimism surrounding a potential ceasefire in the ongoing Russia-Ukraine war, following news that the Presidents of the US and Russia are expected to meet soon.
The Euro Stoxx 600 climbed 0.92% to close at 546.05 in a strong session, with seven of the eleven sectors finishing higher. Technology and financials led the gains.
In the UK, the Bank of England cut its benchmark interest rate to 4% in a closely contested vote. Despite the cut, the FTSE 100 fell 0.69% to 9,100.77, with rate-sensitive sectors under pressure.
Financials were among the best performers across Europe. Insurer Allianz rose 4.1% after posting better-than-expected results and reaffirming full-year guidance. The European bank index rallied to its highest level since 2008, driven by strong moves in lenders such as Santander (+2.1%) and UniCredit (+2.3%).
Shares of Eli Lilly’s European competitors surged following disappointing obesity drug trial results from the US pharma giant. Novo Nordisk jumped 6.68% from recent lows, while Zealand Pharma gained 4.73%.
Technology stocks advanced 1.7%, shrugging off concerns around new US semiconductor tariffs.
However, not all the news was positive. German arms manufacturer Rheinmetall dropped 7.99% after missing second-quarter sales targets, partly due to delays in contract approvals from the German government. Geopolitical developments around the Ukraine conflict also added to the selling in the defence sector.
In fixed income, bond yields across the eurozone dipped slightly, with the German 10-year bund yield down 2 basis points to 2.63%. In contrast, UK 10-year gilt yields rose 3 basis points to 4.55%, following the Bank of England’s rate cut.
Australia
The Australian equity market paused its recent rally on Thursday, with the ASX 200 slipping 12 points (-0.14%) to close at 8,831.40 in a quiet session. Sector performance was mixed, with six sectors finishing higher and five lower — healthcare was the weakest performer.
The healthcare sector fell 1.16% as concerns over potential US tariffs targeting pharmaceuticals led to widespread selling across Asian pharma stocks. CSL reversed its recent gains, declining 1.51% to $265.53, while ResMed dropped 2.12%. A bright spot in the sector was Neuren Pharmaceuticals, which rallied 3.17% after reporting a quarterly royalty income of $14.7 million. Its US partner, responsible for commercialising the drug Daybue, reaffirmed its 2025 US sales guidance overnight, implying increased royalty payments to Neuren.
In the materials sector, Rio Tinto and BHP slipped 0.08% and 0.52%, respectively. Meanwhile, gold miners extended their gains as gold prices remained near recent highs — Northern Star rose 1.52%, and Newmont added 0.99% to $104.36. Rare earths miner Lynas continued its strong run, advancing 2.18% to $12.16. The stock has now gained 16.8% over the past five sessions.
Consumer discretionary stocks once again outperformed the broader market, led by Wesfarmers, which added 0.72% to $89.52, and JB Hi-Fi, which rose 1.83% to $116.41.
The biggest loser on the day was the ASX Ltd, which plunged 8.62% to $64.22. The fall followed its erroneous release of a takeover announcement on Wednesday and a subsequent statement that operating expenses would increase by $25–35 million due to ASIC’s compliance review and inquiry. Adding to the pressure, the ASIC Chairman announced in Canberra that the regulator was “in the final stages” of permitting the CBOE to list Australian company shares.
In fixed income, Australian 10-year bond yields remained steady at 4.24%. On the macro front, Australia posted a larger-than-expected trade surplus of $5.36 billion for June, beating economists’ forecasts of $3.0 billion, as exports rose and imports declined. The Australian dollar firmed and is at 0.6517 in early Friday trading.
ASX200 futures extended declines overnight, pointing to a soft start for Friday’s session, with the contract falling 27 points—equivalent to a 0.31% drop.
Commodities
Oil prices declined for a sixth consecutive session on Thursday, as hopes for a diplomatic resolution to the Ukraine conflict gained traction following news that Presidents Putin and Trump are expected to meet. West Texas Intermediate (WTI) fell 0.73% to US$63.88, while Brent crude dropped 55 cents, or 0.82%, to close at US$66.34.
Gold rose to a two-week high, advancing US$27.05 (+0.80%) to close at US$3,396. Market participants attributed the move to “safe haven” buying, driven by speculation that a more dovish Federal Reserve Chair may be appointed next year. Expectations for a rate cut in September also firmed, with the CME FedWatch Tool showing a 91% probability of a 25 basis point cut.
Silver followed suit, gaining 1.16% to close at US$38.27.
In cryptocurrency markets, Bitcoin surged 1.8% to US$117,240 after President Trump signed an executive order allowing alternative assets—including private equity, real estate, and cryptocurrencies—to be included in 401(k) retirement accounts. Ethereum saw an even stronger move, jumping 5.57% to US$3,876.
Industrial commodities were stable. Copper edged up 0.08% to close at US$9,684 per tonne on the LME. Iron ore settled at US$102.00 in New York, up 20 cents in a session marked by small intraday fluctuations.
Economic Calendar
China:
- Inflation Rate CPI/PPI (Jul) – Saturday 11:30am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
