US stocks gained momentum in afternoon trading, supported by major technology companies. This helped recover some of the losses from the previous week as investors await key earnings reports and the US Federal Reserve's (Fed) monetary policy decision due on Wednesday. The S&P 500 rose by 0.50%, while the Nasdaq 100 increased by 1%. The Dow Jones managed to recover from early losses, ending 30 points in positive territory. Technology giants such as Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META), and Amazon (NASDAQ:AMZN) saw their shares rise between 0.50% and 2% ahead of their second quarter earnings reports, while Tesla (NASDAQ:TSLA) surged 6% following an upgrade from Morgan Stanley.
The JSE FTSE/All Share Index dipped slightly to close at 81 012 on Monday, following three consecutive days of gains, as investors now looking ahead to the Fed monetary policy update. The Fed is anticipated to keep interest rates at a 23-year high but may signal a potential rate cut at its September meeting. Domestic focus will also be on South Africa’s June trade data and budget balance figures. Central bank data revealed that credit growth in South Africa accelerated to 4.27% in June, up from 3.89% in the previous month.
European stocks mirrored the South African trend, with markets failing to sustain early gains and ending lower on Monday. The Eurozone’s Stoxx 50 fell by 0.90% to 4 820, and the pan-European Stoxx 600 dropped 0.20% to 512. Losses in the luxury and tech sectors weighed heavily, with Hermes and LVMH (EPA:LVMH) declining by 2.30% and 1.30%, respectively, due to ongoing weakness in China impacting revenue expectations. Auto manufacturers also struggled, with Stellantis (NYSE:STLA) falling 3.30%, while ASML (AS:ASML) and SAP (BIT:SAP) each decreased by 1.40%, reflecting poor sentiment towards their US tech counterparts.
In contrast, the FTSE 100 in the UK closed slightly higher at 8 292 on Monday, reaching its highest level in two months. Traders are cautiously awaiting policy decisions from both the Fed and the Bank of England, alongside earnings updates. Locally, attention is on Chancellor Rachel Reeves’ first statement to Parliament, which outlined a series of spending cuts and project delays following a review of public finances.
In Asia, China’s Shanghai Composite edged up by 0.03% to 2 892, while the Shenzhen Component fell by 0.96% to 8 515. Mainland stocks struggled to build on previous gains as economic and policy uncertainties in China persisted. Investors are also awaiting a key Politburo meeting later this week for potential stimulus measures. In Japan, the Nikkei 225 Index surged 2.13% to 38 468, and the broader Topix Index rose 2.23% to 2 760, bouncing back from three-month lows amid a rebound in technology stocks.
In commodities, WTI crude futures fell by 2% to $76 a barrel on Monday, extending Friday’s 1.40% decline and hitting levels not seen in over a month. Traders are weighing concerns about sluggish demand from China against potential supply disruptions from the Middle East. Meanwhile, gold prices rose above $2 390 per ounce, continuing gains from the previous session, driven by expectations of forthcoming rate cuts from the Fed.
