United States
U.S. equity indices posted solid gains after better-than-expected non-farm payroll figures and news that Treasury Secretary Bessent will meet with Chinese officials in London this week for trade talks. Non-farm payrolls rose by 139,000 in May, ahead of expectations for a 125,000 increase. While the report included a downward revision to April’s numbers, investors were reassured that the slowdown in job growth was not more severe.
The standout performer on the day was the small-cap Russell 2000 index, which jumped 1.66%. The tech-heavy Nasdaq Composite climbed 1.20% (+231 points) to close at 19,529, rebounding as Tesla recovered from the prior session’s losses. The Dow Jones Industrial Average gained 1.05% to finish at 42,762, and the S&P 500 advanced 61 points (+1.03%) to close at 6,000.36, with all sectors posting gains.
JP Morgan analysts noted that the S&P 500 is likely to reach new highs, largely driven by continued strength in the tech sector. However, they cautioned that volatility could persist.
Technology stocks led the rally, with Nvidia up 1.24% to $141.72 and Alphabet (Google) jumping 3.01% to $174.92. Alphabet shares were buoyed by Walmart’s announcement that it will expand drone deliveries—via Alphabet’s subsidiary Wing—to five new cities. Walmart shares edged lower by 0.50% to $97.47. Amazon rose 2.72% following renewed analyst optimism around its investment in humanoid robots for package delivery.
Energy stocks also performed well, supported by rising oil prices. ExxonMobil gained 2.40% and ConocoPhillips rose 2.19%.
In fixed income markets, Treasury yields moved higher as investors interpreted the strong employment report as a sign that the Federal Reserve may delay interest rate cuts. The 2-year yield rose 12 basis points to 4.03%, and the 10-year yield climbed by the same margin to 4.51%. President Trump reiterated his call for rate cuts this time suggesting that 1% is in order.
The U.S. dollar remained stable, while investors now turn their focus to inflation data due later in the week, which could offer further clarity on the Fed’s policy trajectory.
Europe
Optimism from the stronger-than-expected U.S. payroll report carried into European markets, sparking an afternoon rally that helped major indices close the week in positive territory. The Euro Stoxx 600 rose 0.32% to 553.64, finishing the week up 0.6%. Gains were led by the energy and healthcare sectors, with six of the eleven sectors closing higher.
In the UK, the FTSE 100 followed suit, rising 0.30% to finish at 8,837.91. Financials were among the strongest performers, with Barclays up 1.80% and Standard Chartered climbing 2.91%.
UBS shares jumped 3.80% after the Swiss government proposed that the bank increase its core capital reserves by an additional USD 26 billion. While UBS executives expressed concern over the potential impact on competitiveness, investors welcomed the long 6–8-year timeline for compliance and the regulatory clarity it brings. UBS shares have underperformed their peers year-to-date, making the rebound notable.
Defence stocks, which had rallied earlier in the week on announced higher UK government spending, saw modest pullbacks by session’s end.
In economic data, German industrial production declined as demand from the U.S. weakened. German exports fell by 1.7% overall, with shipments to the U.S. dropping sharply by 10.5%. Meanwhile, UK house price data showed a decline in property values.
In bond markets, German 10-year yields edged 1 basis point lower to 2.57%, while UK 10-year gilt yields rose by 3 basis points to 4.64%.
Australia
In a subdued trading session ahead of the long weekend, the Australian equity market fell by 23 points, or 0.27%, closing at 8,515.70. Market movements were modest, with nine of the 11 sectors ending lower and only two posting gains. The strongest performer was the energy sector, buoyed by a rise in oil prices on renewed optimism around US–China trade negotiations. In contrast, the technology sector was the day’s weakest, reflecting a broader global decline in tech stocks.
The materials sector finished flat overall, though this masked a divergence within the group. Industrial miners generally rose on trade optimism—BHP added 0.66% to $38.23, while Fortescue gained 1.03% to $15.65. Fortescue Chairman Andrew Forrest commented that US tariffs are “not working” and are contributing to inflation. Gold miners, however, came under pressure as the gold price retreated. Evolution Mining fell 1.98% to $8.89, and West African Resources plunged 8.40% to $2.40 after the company agreed to increase Burkina Faso’s free-carried interest in its local mining operations from 10% to 15%, in line with legislation passed in August 2024. The company stated that all other contracts with the country remain unchanged.
The financials sector slipped 0.44%, with most banks in negative territory. Commonwealth Bank fell 0.79% as it trades near all-time highs, while Westpac eased 8 cents to $33.18.
Bond yields edged higher, with the 10-year Australian government bond yield rising by 2 basis points to 4.26%. The Australian dollar was steady, trading around 65 US cents and ending the week at 0.6490.
In overnight futures trading, the ASX 200 rose by 29 points, or 0.34%. The market will be closed today in observance of the King’s Birthday public holiday, though futures trading will continue in the evening.
Commodities
Oil prices climbed on Friday following the stronger-than-expected U.S. jobs report and renewed optimism surrounding trade talks between the U.S. and China. West Texas Intermediate (WTI) rose 1.91% to US$64.58, while Brent crude gained 1.73%, or US$1.13, to settle at US$66.47. Hopes that discussions between the world’s two largest economies could yield progress contributed to the rally.
On the supply side, U.S. rig counts fell again last week, supporting prices. Meanwhile, the spread between WTI and Brent crude narrowed to its lowest level since September 2023. A tighter spread discourages U.S. oil exports to Asia and Europe, potentially reducing global supply.
Copper prices pulled back US$46 to close at US$9,693 per tonne on the London Metal Exchange, trimming weekly gains to 2%. Iron ore also edged lower, falling 0.68% to US$95.05 in New York trading for the Singapore futures contract.
In other industrial metals news, China signalled its willingness to review rare earth exports to the European Union amid ongoing trade negotiations. European automakers have raised concerns over securing a reliable supply of rare earth elements critical to vehicle production.
Gold declined as investor appetite shifted toward risk assets. The precious metal dropped 1.26% to US$3,310. In contrast, silver continued its rally, gaining 0.92% to close at US$35.98 after briefly touching a high of US$36.33. Silver surged 9% for the week, decisively breaking above the US$35 resistance level, which had capped prices over the past year.
Bitcoin also rebounded, rising 5.6% from Thursday’s close to trade at US$D 106,207.
Economic Calendar
AU:
- Markets closed for Kings Birthday Holiday
China:
- Consumer and Producer Prices – Inflation (May) – 11:30am
- International Trade (May) -1:00pm
US:
- Wholesale Inventories (Apr) -12:00am
- NY Fed Inflation Expectations (May) -1:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
