Geopolitical uncertainty has been the name of the game for global markets in recent years. With tensions escalating between Israel and its neighbours in the Middle East, trading overnight was no exception.
Both US and European markets inched higher overnight, but signals were mixed.
Investors are also awaiting non-farm payroll data due on Friday. Stronger-than-expected US private payroll data is indicating stability in the US labour market – Friday’s numbers will tell.
US and European markets
In the US, technology stocks drove what little gains there were – with some notable exceptions.
Semiconductor and AI darling Nvidia gained 1.6% as the semiconductor industry continues to flourish, having hit US$51.3 billion in financial year 2024, an 18.7% increase over the same period the year before.
An upgrade from market perform to outperform on AI initiatives by Northland Securities drove Salesforce stock up 3.2% and the S&P500 Energy index rose 1.1%.
On the other side of the ledger, Nike (NYSE:NKE) withdrew its annual revenue forecast just as its new CEO entered the picture, lopping 6.8% off its share price.
Tesla (NASDAQ:TSLA) also fell 3.5% after failing to meet third-quarter vehicle delivery expectations.
The Dow rose 39 points or 0.1%, the S&P500 inched up 0.01% and the Nasdaq also added 0.1%.
In Europe, the story was much the same. The energy sector gained 1.6% as oil and gas stocks benefited strongly from geopolitical tensions, marking its best session in more than eight weeks as Israel vowed to respond to a missile attack from Iran.
Utilities in turn fell 1.6%. The FTSE300 lifted 0.1% and the FTSE100 put it one of the better performances of the evening, gaining 0.2%.
Currencies and commodities
The US Dollar climbed in overnight trading. The Euro fell from US$1.1082 to near US$1.1045, the Aussie from US$0.6904 to US$0.6880 and the Japanese Yen from 143.70 yen per US dollar to near JPY146.45 by the US close.
Oil prices were higher but an unexpected lift in US crude inventories limited the climb. US crude stocks increased by 3.9 million barrels to 417 million barrels, compared to analysts’ expectations of a 1.3-million-barrel decline.
Brent crude prices increased by US$0.34, or 0.5%, to US$73.90 a barrel, while US Nymex crude gained US$0.27, or 0.4%, to US$70.10 a barrel.
Base metal prices climbed as investors remained optimistic about China's stimulus measures. Copper futures gained 1.3%, and aluminium futures rose 0.6%.
Iron ore futures rose by US$0.55, or 0.5%, to US$109.29 a tonne.
While gold shot up in the opening stages of escalation in the Middle East, it has since slipped back as traders await more concrete indications of how bad the fighting will get.
Gold futures fell by US$20.60, or 0.8%, to US$2,669.70 an ounce. Spot gold traded near US$2,658 an ounce at the US close.
On the small cap front
The ASX Small Ordinaries fell 0.37% yesterday, following the ASX200’s lead as it dipped 0.15%.
You can read about the following and more throughout the day on our website.