United States
US equities were largely steady on Thursday, with investors cautiously navigating a volatile week marked by sharp swings in bond markets and renewed fiscal jitters. The S&P 500 edged down 0.04%, the Dow Jones Industrial Average closed flat, and the Nasdaq 100 gained 0.3%, bolstered by strength in mega-cap technology stocks.
The session followed a significant rebound in Treasuries, which helped calm nerves after the heaviest sell-off in US government bonds in over a month. The 10-year Treasury yield retreated seven basis points to 4.53%, while the 30-year yield eased to 4.66%. This reversal helped restore some confidence after Wednesday’s weak 20-year bond auction sparked fresh concerns about the growing US deficit and its long-term inflationary implications.
Economic data painted a mixed picture. Initial jobless claims fell to their lowest in four weeks, reinforcing the view that the labour market remains resilient. However, existing home sales unexpectedly declined, suggesting that higher mortgage rates and affordability constraints are beginning to bite. Separately, forward-looking business activity indicators showed a slight improvement, indicating that while trade-related anxiety has subsided somewhat, inflationary pressures continue to loom.
Policy developments added further intrigue. Federal Reserve Governor Christopher Waller floated the possibility of interest rate cuts in the second half of 2025, provided the Trump administration’s tariff agenda stabilises. In a separate ruling, the US Supreme Court upheld the Fed’s independence by shielding it from presidential interference—an important move to reassure markets that monetary policy won’t become a political battleground.
Market volatility remained elevated, though slightly moderated. The VIX slipped 0.5 points to 28.20, still reflecting heightened investor caution. Bitcoin continued to trade near record levels, holding above US$110,000. Gold retreated 0.6% to US$3,294 per ounce, snapping a four-day rally. Oil prices remained under pressure for a third straight session.
Europe
European markets finished lower as investors grappled with rising global bond yields, weak earnings updates, and geopolitical uncertainty. The Stoxx Europe 600 Index dropped 0.6%, reflecting broad-based weakness led by consumer staples, automakers, and real estate.
Investor sentiment remained fragile after the US bond market rout earlier in the week spilled over into European assets. Renewable energy stocks were among the hardest hit, with Denmark’s Orsted and Vestas falling sharply following the release of a revised US tax bill that would phase out clean energy incentives sooner than expected.
Elsewhere, EasyJet fell 2.6% after reporting wider-than-anticipated quarterly losses. Real estate firms including British Land and Germany’s Freenet also underperformed on the back of disappointing financial results. In contrast, UK-based Johnson Matthey surged after Honeywell agreed to acquire its catalyst business, providing a rare pocket of strength in an otherwise downbeat session.
Traders continued to watch the trajectory of US-EU trade negotiations closely, with hopes for a renewed agreement facing fresh scepticism. While some analysts see relative valuation support in European equities, the region’s fragile economic outlook and political uncertainty are keeping gains in check.
Australia
Australian equities retreated on Thursday, snapping a two-day rebound as traders locked in profits following a strong run in banks and growth stocks. The S&P/ASX 200 fell 0.5%, or 38.1 points, to 8348.7, with ten of eleven sectors closing in the red. The broader All Ordinaries also lost 0.5%.
Financials weighed heavily on the index, led by Commonwealth Bank, which dropped 1.3% to $172.72 after reaching record highs a day earlier. Macquarie Group declined 2.2% to $205.54 as investors shifted to the sidelines amid global interest rate volatility. The technology sector also came under pressure, with WiseTech Global down 2.3% and Xero off 1.6%.
Consumer discretionary stocks fell after Wesfarmers warned of larger-than-expected losses in its lithium operations. Aristocrat Leisure dropped 2%, while Zip Co slumped 6.5% following cautionary remarks from Swedish BNPL peer Klarna about rising consumer delinquencies.
Gold stocks outperformed, lifted by stronger bullion prices. Northern Star surged 5.4% to $20.25, while Newmont added 2.3% to $82.98. Lynas Rare Earths jumped 7% to $8.13 after a broker upgraded the stock, citing expected demand from the AI-driven robotics sector.
In company news, Insurance Australia Group advanced 2.7% after the ACCC cleared its acquisition of RACQ Insurance. SKS Technologies surged over 21% following a $100 million contract award for a data centre project.
Despite Thursday’s retreat, ASX futures point to a modestly positive open today, with SPI contracts up 22 points, or 0.3%, to 8388, reflecting improved sentiment following a calmer session on Wall Street.
Commodities
Commodity markets were mixed overnight. Gold fell 0.6% to US$3,294 an ounce, easing from recent highs as bond yields declined and investors booked profits after a strong run. Oil continued to weaken, with Brent crude slipping 1.3% to US$64.05 a barrel—its lowest level in two weeks—as reports surfaced that OPEC+ is considering a production increase at its June meeting.
Iron ore declined 0.5% to US$99.30 per tonne, reflecting cautious sentiment on Chinese demand and concerns about oversupply. Copper and aluminium traded largely flat, with little momentum ahead of key industrial production data from Asia.
Bitcoin hovered near its all-time high of US$111,092, maintaining momentum as crypto markets remain resilient amid global macro uncertainty. Ether edged up 0.3% to US$2,648.
Currency markets saw muted moves. The Australian dollar eased 0.4% to US64.10¢, weighed down by a firmer US dollar and commodity softness. The Bloomberg Dollar Spot Index rose 0.2%, while the Japanese yen gained 0.1% to 143.86 per dollar. The euro was unchanged at US$1.1287.
Economic Calendar
- No major data
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
