US, European Markets Mixed as AI Spending, Earnings Shape Sentiment
US and European equities diverged as AI spending and earnings continue to shape investor sentiment in risk assets. Concerns over the returns from heavy AI investment set the global tone after Alphabet’s (-12.3%) weaker search and advertising sales and elevated spending pressured technology shares.
The NASDAQ closed down 1.38%, while the S&P 500 and Dow Jones ended the session 0.30% and 0.25% lower, respectively, before disappointing Amazon (-4.3%) and Intel (-3.6%) updates drove futures lower, stockbroking and portfolio management of First National Bank (FNB) said in a brief.
Europe diverged as corporate earnings improved sentiment and the European Central Bank left rates unchanged, with the Euro Stoxx 50 closing 0.64% higher and the FTSE 100 gaining 0.26%, supported by energy, pharmaceuticals, and defence names.
Asian trading remains split this morning. The Hang Seng Index is up 1.64% as energy, technology services, and financial shares rebound, while the Nikkei 225 has fallen 2.38% so far amid the regional technology sell-off.
Australia proved more resilient, with strong domestic earnings and broad sector gains helping the ASX 200 close 0.18% higher.
In South Africa, the Johannesburg Stock Exchange (JSE) is set for a softer open this morning after closing higher in the previous session as global futures retreat and Asian markets are trading mixed.
Lower Treasury yields and a softer dollar have yet to offset pressure from the technology sell-off, although Tencent’s 2.12% gain provides a positive read-through for Naspers and Prosus.
On the resources side, a 1.12% decline in the S&P/ASX 300 Metals and Mining Index points to pressure on JSE miners, with copper extending its fall.
Brent crude is firmer, which could lend support to Sasol, but broad weakness across precious metals is likely to weigh on gold miners and PGM counters as gold, platinum, and palladium trade lower.
South African equities edged higher yesterday, with the All Share Index rising 0.25% and the Top 40 gaining 0.30%.
Market sentiment was driven largely by a significant GDP revision from Statistics South Africa, which rebased GDP to 2022 prices (from 2015) and found the economy was 5.3% larger in 2025 than previously estimated.
The revision is expected to lower South Africa’s debt-to-GDP ratio materially and has strengthened expectations of a potential sovereign credit rating upgrade.
Financials were the standout sector, advancing 0.89%, as improved fiscal perceptions and continued foreign demand for South African bonds supported domestic banks and financial stocks. Resources were broadly flat (-0.01%), while Industrials eased 0.03%.
