United States
U.S. stocks advanced to start the week, buoyed by optimism around upcoming earnings results, which overshadowed concerns over trade policy. This positive sentiment propelled both the Nasdaq and S&P 500 to record intraday highs before they drifted lower later in the session.
The Nasdaq Composite finished the day up 0.38% at 20,974.17, while the Dow Jones Industrial Average edged 0.04% lower, losing 19 points to close at 44,323. The S&P 500 closed at a new record high of 6,305.60, gaining 8 points (+0.14%), supported by strength in major technology stocks. Seven of the eleven sectors closed higher, led by Communication Services, while four finished in the red.
Many analysts remain bullish on the S&P 500, with FactSet reporting a consensus expectation for a further 5.4% increase from current levels. Notably, Wells Fargo’s Chief U.S. Strategist is forecasting an 11% rally, targeting over 7,000, citing a “real secular trend in AI that will continue.”
Gains in individual stocks helped push the indexes higher. Alphabet (Google) rose 2.80% to $191.15 ahead of its earnings report on Tuesday. Meta and Amazon also advanced, up 1.23% and 1.4% respectively. A Wall Street Journal report noted that Amazon has been subtly raising prices on lower-cost items by an average of 5% in response to tariffs.
Verizon surged 4.04% after reporting second-quarter earnings that exceeded analysts’ expectations. This trend of earnings beats has been a hallmark of the current season, with 85% of companies reporting so far surpassing forecasts.
On the trade front, U.S. Trade Secretary Lutnick stated over the weekend that while a deal with the EU is expected, the August 1 deadline remains firm for countries to begin paying the reciprocal tax.
Bond yields declined again, with the 10-year Treasury yield falling 6 basis points to 4.37%, and the 2-year yield slipping to 3.85%. Market attention now turns to a speech from Fed Chair Jerome Powell. With markets currently split on whether the Fed will cut rates at the September meeting, Powell’s remarks could offer valuable guidance.
Europe
European equities started the week on a cautious note, overshadowed by ongoing trade negotiations between the EU and the U.S., with consensus forming around the likelihood of tariffs ranging between 15–20%. Reports also indicate that the EU is preparing retaliatory levies in response to the anticipated U.S. measures.
The Euro Stoxx 600 edged lower by 0.08% to 546.58, with seven of its sectors ending the day in negative territory, led by declines in healthcare. In contrast, the UK’s FTSE 100 gained 0.23% to close at 9,012, supported by strength in mining stocks.
The FTSE was lifted by rising iron ore and copper prices following China’s announcement of a major dam project in Tibet beginning construction. Mining giants Glencore and Antofagasta rose 3.03% and 4.71% respectively. Precious metals miners also rallied as gold and silver prices advanced, with the sub-sector adding 3.60%.
On the corporate front, carmaker Stellantis reported a €2.3 billion loss for the first half of the year, citing the impact of U.S. tariffs and a 25% drop in exports during the second quarter. Despite the weak results, Stellantis shares rebounded to close 1.54% higher. Budget airline Ryanair surged 5.71% after posting second-quarter profits that nearly doubled, sparking gains across the airline sector.
In fixed income markets, bond yields fell as investors moved to safer assets. The German 10-year bund yield dropped 8 basis points to 2.61%, while the UK 10-year gilt yield declined to 4.60%.
Australia
Australian shares declined sharply to start the week, with the ASX 200 falling 1.02%, or 89 points, to close at 8,668.20, reversing Friday’s strong finish. The sell-off was broad-based, with nine of the eleven sectors ending the day lower. Financials led the declines, while materials and energy were the only sectors to post gains, supported by continued strength in iron ore prices.
Major banks came under pressure, with all four of the big banks falling by more than 2%. Analysts attributed the weakness to elevated valuations, suggesting the pullback reflected broad-based profit-taking. Commonwealth Bank dropped 2.52% to $177.87, while Westpac was the worst performer among the majors, down 3.61% to $33.07. Regional banks were also hit, with Bendigo Bank and Bank of Queensland declining 2.88% and 3.17%, respectively.
AMP was a rare bright spot within the financial sector, surging 9.77% to $1.685 after reporting a strong increase in second-quarter cashflows. Analysts cited structural improvements in its product lineup and platform offering as the key drivers behind the result.
Iron ore prices climbed to six-month highs, lifting bulk miners. Fortescue gained 1.47%, and Rio Tinto rose 1.19%. South32 also rallied after announcing a 19% quarter-on-quarter increase in copper production at its Chilean mine. Energy stocks advanced as well, with Woodside up 1.43% and coal miners Whitehaven and Yancoal each gaining more than 4%.
Global trade concerns weighed on sentiment, particularly around potential EU tariffs of 15–20% and new levies on pharmaceuticals. The healthcare sector dropped 2.14%, with Sigma Healthcare and Pro Medicus among the worst performers.
Bond yields edged lower, with the 10-year yield falling 1 basis point to 4.32% and the 2-year yield declining to 3.32%. Today, investors will turn their attention to the minutes from the Reserve Bank of Australia’s most recent policy meeting, which may offer insights into the decision to hold rates steady and provide clues ahead of the August meeting.
Overnight futures trading points to a small recovery to start the day with the ASX200 futures up 0.14% with a 12-point gain. Gains in mining stocks overnight has seen the US listed BHP shares close at the equivalent of A$40.75 an increase of 0.72% from the Sydney close. The Australian dollar has benefitted from a weaker greenback and is trading at 0.6525
Commodities
Gold moved a five-week high on Monday, climbing 1.41% to US$3,397 as investor nerves were rattled by comments from Treasury Secretary Bessent. Over the weekend, Bessent called for a review of the Federal Reserve, criticising “fear mongering over tariffs” despite the lack of evident inflationary pressure appearing yet —a move that added uncertainty to monetary policy outlook. Additional tension came from reports that the EU is preparing countermeasures in response to U.S. tariffs, further clouding the global trade landscape.
Silver also rallied, jumping 1.98% to a record closing high of US$38.93, buoyed by the this nervosuness and weakness in the U.S. dollar. The Bloomberg Dollar Index fell 0.50%, erasing gains made last week.
Oil prices softened as markets shrugged off fresh EU sanctions on Russia, viewing them as having limited impact on global supply. Brent crude slipped 0.26% to US$69.10, while West Texas Intermediate declined 0.21% to US$67.20.
Iron ore extended its strong performance, reaching a six-month high of US$103.55 in New York trading, up 2.7% since Friday. The rally is driven by optimism around increased Chinese demand, particularly as the country begins construction on the world’s largest dam in Tibet. Copper followed suit, gaining 0.83% to close at US$9,860 a tonne on the LME, supported by a spike in Chinese copper imports.
Economic Calendar
AU:
- RBA Board July Interest Rate Decision Meeting Minutes – 11.30am
US:
- Fed Chair Powell Speech – 10:30pm
- Richmond Fed Manufacturing Index (Jul) – 12:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
