United States
Wall Street’s sharp rebound from the April correction showed signs of fatigue overnight, with major indices delivering mixed performances as investors digested the extent of recent gains and turned cautious ahead of key economic releases. The S&P 500 managed a modest rise of 0.1%, supported largely by strength in technology megacaps, while the Dow Jones Industrial Average fell 0.2%. The Nasdaq 100 outperformed, gaining 0.6%, as enthusiasm around artificial intelligence and semiconductor demand resurfaced.
The “Magnificent Seven” cohort led the charge again, rising 1.7%, bolstered by a 5.6% surge in Nvidia after U.S. authorities signalled expanded approval for chip sales to strategic partners in the Middle East. Cisco Systems also gained in after-hours trade after providing a bullish outlook for the upcoming quarter. Meanwhile, Boeing advanced following confirmation of a record-breaking long-range aircraft order from Qatar Airways, which coincided with Donald Trump’s diplomatic visit to the Gulf.
Despite the tech-led momentum, overall sentiment remained cautious. The S&P 500’s 14-day RSI remains at elevated levels, pointing to near-term overbought conditions. Traders noted the recent rally, sparked by easing trade tensions and resilient economic indicators, may have run ahead of fundamentals—especially in sectors not directly benefiting from the AI trade.
In fixed income, bond yields rose as rate cut expectations continued to fade. The 10-year Treasury yield climbed 7 basis points to 4.54%, while the 2-year yield also moved higher, reflecting waning confidence in two cuts by year-end. The U.S. dollar was steady, with the Bloomberg Dollar Spot Index flat, although the yen strengthened 0.4% and the euro edged lower to 1.1168.
Investors are now focused on upcoming macro data, including April retail sales and PPI, as well as commentary from Fed Chair Jerome Powell later tonight. Fed officials have expressed a cautious tone in recent remarks, balancing optimism over economic resilience with uncertainty surrounding inflationary pressures and trade disruptions.
Europe
European markets pulled back for the first time in over a week, with the Stoxx Europe 600 declining 0.2% as investors locked in gains following a strong run driven by optimism over global trade progress. The retreat was broad-based, led by declines in consumer goods and healthcare, while banks and industrials outperformed thanks to rising bond yields and infrastructure optimism.
Burberry rallied 17% after posting a better-than-expected Q4 update and outlining aggressive cost-cutting plans. In contrast, Alstom plunged 17% as weak forward guidance overshadowed otherwise strong earnings. The divergence highlighted the importance of earnings visibility in a market increasingly sensitive to valuation.
The broader mood in Europe reflected a growing sense that equities may need additional earnings momentum to justify current levels. Strategists noted that while the risk of recession has receded somewhat, growth in the region remains fragile, and multiples have expanded meaningfully in recent weeks.
In fixed income, government bond yields pushed higher alongside their U.S. counterparts. Germany’s 10-year bund yield rose to 2.70%, while the UK 10-year gilt yield hit 4.71%. Economic data from the UK showed softer employment conditions and wage pressures, reinforcing expectations of subdued household consumption in the months ahead.
Australia
The Australian share market eked out a sixth straight day of gains on Wednesday, although the performance was muted compared to the strength seen in U.S. technology stocks. The S&P/ASX 200 added 0.1%, or 10.6 points, to close at 8,279.6, with energy and mining stocks offsetting declines in financials and gaming.
The standout sector was energy, as Woodside rose 3.4% to $22.31 following news it was in talks with Saudi Aramco over a potential stake in its Louisiana LNG project. Ampol added 1.7% to $26.77 on continued strength in refined fuel margins. Iron ore miners also lifted, with BHP up 0.6% to $39.45 and Fortescue climbing 2.2% to $16.97, supported by a 2.2% rise in spot iron ore to over USD 101/t.
However, losses in index heavyweights weighed on the broader market. Macquarie Group dropped 1.6% to $211.86 after ASIC launched legal proceedings over alleged short sale reporting breaches. Aristocrat Leisure tumbled 8.9% after delivering half-year revenue that fell short of market expectations.
In the financials space, Commonwealth Bank added 0.8% to $167.50 after releasing quarterly results showing a 6% profit rise, broadly in line with estimates. NAB climbed 1.4% to $36.10, while Westpac edged lower. Life360 soared another 9.5% to $29.75 following its recent earnings beat, with analysts upgrading forward sales estimates. DigiCo Infrastructure REIT jumped 4.8% after gaining inclusion in the MSCI Australia Index.
On the downside, Insignia Financial fell 15.8% to $3.37 after private equity group Bain Capital withdrew its acquisition proposal, citing macroeconomic uncertainty. Mayne Pharma also dropped 15.6% after retracting marketing material related to its contraceptive product due to U.S. regulatory concerns.
Australian bond yields followed global moves higher, with the 10-year government yield rising to 4.48%. ASX200 futures are pointing to a 36-point decline, or -0.4%, at the open, as investors brace for key employment data and question whether further upside is justified in the near term.
Commodities
Commodities were mixed overnight. Brent crude fell 1.2% to USD 65.81 a barrel, retreating from recent highs as traders took profits and reassessed the pace of demand recovery. WTI slipped to USD 62.83 amid ongoing volatility in energy markets and cautious positioning ahead of OPEC+ discussions.
Gold fell sharply, losing 2.3% to USD 3,177.25 an ounce, as stronger bond yields and a resilient dollar weighed on non-yielding assets. Silver also retreated after recent strength, while copper remained near USD 9,600, supported by hopes of steady industrial activity in China. Iron ore extended gains, climbing 2.2% to USD 101.70, reflecting firm demand and renewed optimism for construction-led growth in Asia.
The Australian dollar declined 0.6% to USD 0.6430 as commodity gains were offset by renewed U.S. dollar strength and rising U.S. bond yields. In crypto markets, Bitcoin slipped 0.7% to USD 103,539, while Ethereum fell 3.2% to USD 2,603, both pulling back from recent highs as speculative momentum eased.
Economic Calendar
AU:
- Employment (Apr) – 11:30
EU:
- GDP (Q1) – 19:00
US:
- Retail Sales (Apr) – 22:30
- Producer Prices (Apr) – 22:30
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
