Global Equities Markets Mixed as Rising Energy Costs Dampen Momentum
The global equities market delivered mixed performance, with US stocks closing steady amid a mixed outing in European bourses as rising energy costs influenced investors’ sentiment.
The oil market faced supply-risk pressure, with Brent crude rising on Monday to near $90 per barrel. This set the overnight tone as rising energy prices revived inflation concerns ahead of key US consumer price data due later this week.
The S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average all ended the prior session barely changed, as gains in financials were offset by losses in technology and consumer staples, a stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief.
US stocks ended Monday’s session flat, with the S&P 500 (-0.06%) churning near all-time highs as oil’s four-day rally pushed 10-year Treasury yields higher, stoking Federal Reserve rate concerns that offset a broadly strong earnings backdrop, with financials the lone bright spot while technology and consumer staples declined.
As a result, the Dow Jones Industrial Average gave back 0.11%, and the Nasdaq was down 0.32%.
European equities ended the session on a divergent note, with the Euro Stoxx 50 edging up 0.18% to a fresh record close as technology and energy stocks outperformed.
Meanwhile, the FTSE 100 fell 0.35% as rising oil prices stoked inflation fears, lifted gilt yields, and weighed on rate-sensitive defensives.
In the Asia-Pacific region, the Nikkei 225 was closed for a public holiday in Japan, while the Hang Seng has fallen 0.63% so far as elevated oil prices weigh on Hong Kong sentiment.
The ASX 200 gained 0.37% after the Reserve Bank of Australia (RBA) held its cash rate at 4.35% for a second consecutive meeting, with materials stocks lending support.
Despite global futures pointing broadly higher, the Johannesburg Stock Exchange (JSE) is set for a cautious open on Tuesday as investors grapple with higher oil prices.
In addition, Tencent is down 2.20%, a move that is likely to weigh on Naspers and Prosus at the open. The ASX Metals and Mining Index has gained 1.13% in today’s session, lending support to resource counters.
Gold has edged higher, providing a modest tailwind for gold miners, while platinum is barely changed, offering little fresh direction for precious metals counters.
The South African local bourse ended the week on a strong footing, outperforming most global peers as investors rotated into precious metals amid a sharp rally in gold.
Precious metals and mining stocks surged after Friday’s US non-farm payrolls report showed an unexpected decline of 23 000 jobs in July, alongside downward revisions to prior months, significantly reducing expectations of a Federal Reserve rate hike in September.
The weaker dollar and lower interest rate outlook propelled gold, providing a strong boost to gold-linked equities. Against this backdrop, the All Share Index and Top 40 gained 1.92% and 2.18% to close at 117 518 and 109 593 points, respectively.
Resources (+5.67%) led the market higher, with the Precious Metals and Mining Index advancing 7.28%, supported by strong gains from AngloGold Ashanti (+9.7%) and Gold Fields (+8.8%). Industrials rose 1.13%, aided by Naspers (+3.83%), while Financials edged 0.17% lower.
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