Global Markets Rattle by U.S. Inflation, Ceasefire Hiccups
Persistent volatility over the United States (US)-Iran ceasefire and higher-than-expected US inflation rippled through global markets, with Wall Street closing mixed, First National Bank (FNB) said in a morning brief.
The S&P 500 ended the session down 0.16%, and the NASDAQ slipped 0.71%, weighed by technology stocks, while the Dow Jones edged up 0.11%.
Consumer inflation in the United States hit a three-year high in April, government data showed Tuesday, with the economic fallout of the Iran war rippling through the world’s largest economy.
The consumer price index (CPI) rose 3.8 per cent year-on-year, up from March’s 3.3 per cent figure, the US Bureau of Labour Statistics said.
The US-Israel war on Iran has engulfed the Middle East in violence, with Iranian retaliatory action targeting Washington’s regional allies and virtually blocking the Strait of Hormuz.
European shares came under pressure, with the Euro Stoxx 50 dropping 1.48% and the FTSE 100 slipping 0.04%, amid rising energy prices, mounting political uncertainty, and a sell-off in banks and insurers.
In Asia, the Hang Seng Index is currently up 0.26% as investors balance optimism over the Trump-Xi summit with caution surrounding inflation and geopolitical risk. The Nikkei 225 is trading 0.87% higher, while the ASX 200 is down 0.55%.
The JSE suffered its worst session in two weeks on Tuesday as investors grappled with escalating Middle East tensions and disappointing domestic corporate updates.
The All-Share Index fell 1.42%, while the Top 40 Index declined 1.52%. Resources led losses, plunging 2.44% as precious metal miners (-2.96%) bore the brunt of falling gold prices amid uncertainty over the deadlocked United States-Iran conflict.
Industrials dropped 1.66%, weighed down by sharp declines in technology stocks, including Prosus (-5.29%) and by extension, Naspers (-4.77%), as well as the MTN Group, which declined 1.17% following weak earnings commentary.
Financials proved most resilient, declining just 0.35%. Manufacturing production data for March provided a rare bright spot, rising 0.9% y/y, well above expectations of just 0.3% growth.
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