United States
US equity and bond markets were closed for Independence Day on Friday, but futures trading hinted at a more cautious start to the week ahead. S&P 500 futures fell 0.6%, while Dow Jones and Nasdaq 100 futures each declined by the same margin, as investors weighed renewed trade tensions ahead of a looming July 9 deadline. President Donald Trump warned that unilateral tariffs of up to 70% may be imposed as early as today if trade agreements with key partners are not reached.
A draft US-Swiss deal reportedly includes tariff protections on pharmaceutical exports, while the EU and its automakers pushed for tariff relief in exchange for increasing US investment. Meanwhile, President Trump’s administration is reportedly preparing to restrict AI chip exports to Malaysia and Thailand to counter suspected smuggling into China.
Despite the pause, the S&P 500 remains on track for a third consecutive month of gains, buoyed by strength in the domestic economy and optimism over earnings and monetary policy support. However, strategists, including Bank of America’s Michael Hartnett, have cautioned that the index is nearing levels that could trigger profit-taking, especially as bubble risks mount.
Europe
European equities closed broadly lower on Friday as trade uncertainty with the US weighed on sentiment. The Euro Stoxx 600 dropped 0.5% to cap a week of losses, having recovered from an intraday fall of 0.9%. Trade-exposed sectors such as mining and autos underperformed, while healthcare and telecommunications provided some defensive support.
Swiss pharmaceutical firms Novartis and Roche gained 1.4% and 0.9% respectively after the draft US-Swiss deal hinted at exemptions from tariffs. Rheinmetall climbed 3.3% on positive broker sentiment, while drinks group Remy Cointreau recouped initial losses despite China’s announcement of anti-dumping duties on European brandy.
In the UK, political concerns continued to weigh on sentiment. The FTSE 250 mid-cap index declined 0.7%, with speculation around Chancellor Rachel Reeves’ role rattling investors earlier in the week. Prime Minister Keir Starmer later reaffirmed Reeves would remain in her post. UK 10-year gilt yields rose 2 basis points to 4.56%, extending Wednesday’s selloff driven by fiscal concerns.
Meanwhile, widespread flight cancellations disrupted travel across the continent as a French air traffic controllers’ strike entered its second day.
Australia
The ASX 200 closed at a record 8603 on Friday, rising 7.2 points or 0.1%, supported by gains in retail and technology shares ahead of a widely anticipated interest rate cut by the Reserve Bank of Australia at its Tuesday meeting. The index ended the week up 1%.
Tech stocks led the rally, with Appen rising 3.5%, Life360 up 1.9%, and WiseTech Global gaining 1.1%. Retailers also attracted interest, with Wesfarmers climbing 0.8% and Premier Investments advancing 1.4%. Rate-sensitive buying reflected growing confidence that the RBA will lower the cash rate to 3.6%.
Commonwealth Bank continued its recent slide, falling 0.9% to $178 and extending its retreat to 7.2% from recent highs. In contrast, ANZ, Westpac, and NAB posted modest gains. Merlon Capital’s Neil Margolis noted that while rate cuts support credit growth, they can pressure bank margins, particularly given elevated valuations.
The materials sector lagged, with BHP and Rio Tinto down 1.4% and 1.3% respectively, although Fortescue eked out a 0.4% gain.
In corporate developments, Silk Logistics soared 23.3% after the ACCC cleared its acquisition by DP World Australia. ARB Corp rose 3.6% following a Citi upgrade, while G8 Education fell 3.5% amid ongoing reputational concerns.
Futures point to a modestly positive open, with the ASX200 contract up 9 points, or 0.1%, to 8612.
Commodities
Oil prices declined ahead of today’s OPEC+ meeting, where delegates will consider a production increase exceeding 411,000 barrels per day for August. West Texas Intermediate slipped 0.7% to US$67.00, while Brent crude eased 0.3% to US$68.90, reflecting concerns about a potential supply glut.
Gold rose 0.3% to US$3,337.22 per ounce as investors sought safe havens amid trade uncertainty. Silver edged 0.34% higher to US$36.97%, while Bitcoin dropped 2.2%, marking its largest single-day decline since 22 June.
In currency markets, the US dollar dipped slightly. The euro climbed 0.2% to USD 1.1775, while the yen strengthened 0.3% to 144.51 per dollar. The Australian dollar remained steady at USD 0.6570. The pound held flat at USD 1.3650, and the offshore yuan was little changed.
Economic Calendar
EU:
- Retail Sales (May) – 19:00
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
