AI, Tech Stocks Drive Wall St. to Record High, European Markets Rally
Global equity markets advanced, with Wall Street closing higher after buying interest in major technology companies following earnings releases.
With a significant push from the Magnificent Seven, stock market analysts said global equity markets are once again trading near the record levels they reached a few weeks ago, before semiconductor stocks pulled back on profit-taking.
A resurgence in the artificial intelligence trade, combined with growing optimism over a potential US-Iran agreement to reopen the Strait of Hormuz, drove Wall Street to fresh record highs overnight.
The S&P 500 (+1.79%), the Dow Jones Industrial Average (+1.71%), and the Nasdaq Composite (+2.59%) all closed at all-time peaks, led by semiconductor and mega-cap technology names as softer oil prices provided an additional tailwind.
European equities closed higher on Tuesday as well, with the Euro Stoxx 50 up 0.94%, driven by a strong earnings season including a beat from Bayer, a rally in mining shares as copper climbed to a two-month high, and optimism over a potential US-Iran deal.
Meanwhile, the FTSE 100 lagged with a more modest 0.20% gain as a drop in oil prices weighed on BP despite the stock beating estimates.
The positive momentum carried through to Asia-Pacific, where the Nikkei 225 surged 3.12%, tracking gains in chipmakers across the region, while the ASX 200 advanced 0.87% to a new all-time high.
The Hang Seng Index added 0.11%, with Hong Kong technology shares also participating in the rally. The Johannesburg Stock Exchange (JSE) is set for a stronger open this morning as global futures point firmly higher and Asian markets are trading with broad-based gains, First National Bank (FNB) said in its midweek brief.
Tencent is up 0.37% in Hong Kong, a positive read-through for Naspers and Prosus on the local bourse. The ASX 300 Metals and Mining Index is surging 3.65% in Sydney, lending strong support to resource counters on the JSE.
Spot gold and spot platinum are both sharply higher this morning, providing a meaningful tailwind for gold miners and precious metals counters.
The local bourse recorded a strong close on Tuesday on the back of strong earnings results for the JSE coupled with easing Middle East tensions, lower oil prices, and stronger precious metal prices, which supported risk appetite.
The All Share Index rose 1.40% to its highest level in several weeks at 114 256 points, and the Top 40 rose 1.56% to 106 201 points. Resources (+2.96%) outperformed as stronger precious and industrial metal prices lifted mining counters.
The Industrial Metals & Mining Index (+3.45%) and Precious Metals & Mining Index (+3.10%) were the best-performing sectors amid gains in counters Valterra (+10.01%) and Sibanye Stillwater (+7.42%).
Financials advanced 1.42% as investors responded favourably to the resilient earnings result from Nedbank (+6.31%). Industrials (+0.34%) performed modestly, while Telecommunications names like Telkom (-3.13) and MTN Group (-2.15%) weighed on sector performance.
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