Wall Street’s major indices traded flat on Wednesday

On Wednesday, Wall Street’s three major indices traded flat after a decline in the previous session, signalling that the post-election rally under President Trump may be losing momentum. Traders were focused on the latest Consumer Price Index (CPI) data, which met expectations and bolstered forecasts for a potential Federal Reserve (Fed) rate cut next month. The annual inflation rate in the US rose to 2.60% in October, up from 2.40% in September, while monthly CPI growth remained steady at 0.20%. Core inflation, excluding food and energy, held steady at 3.30% year-on-year and 0.30% month-on-month.

Locally, the FTSE/JSE All Share Index mirrored global sentiment, dipping slightly on Wednesday to trade below the 84 000 level. This marked its fourth consecutive day of losses. Traders were awaiting the release of the US inflation report, which had a muted effect on market sentiment. Concerns over China's economic outlook and uncertainties surrounding President Trump’s planned policies continued to weigh heavily on investor confidence. On the corporate front, resource-linked stocks, such as Lighthouse Properties (JO:LTEJ), Remgro (JO:REMJ), and Montauk Renewables (JO:MKRJ), led the losses, dropping by around 2%. However, Karoo, Shaftesbury Capital (JO:SHCJ), and AngloGold Ashanti (JO:ANGJ) were notable gainers, posting increases between 1.60% and 2.30%.

The FTSE 100 also struggled on Wednesday, retreating from early gains to close at a three-month low. The alignment of US inflation data with expectations left little direction for future Feds rate decisions. In corporate news, Experian’s shares fell over 3%, despite offering solid guidance, likely due to weaker-than-expected recovery in its Latin American B2B unit. Intermediate Capital dropped more than 5% after reporting pretax profits that were 30% below forecasts, driven by underperformance in its Investment Company segment and rising operational costs. However, Just Eat Takeaway saw a strong surge of 15% after agreeing to sell Grubhub to Wonder for $650 million.

In the Eurozone, stocks followed the global trend, with both the STOXX 50 and STOXX 600 indices declining by around 0.40%. Despite a brief recovery earlier in the day, sentiment remained cautious as investors continued to assess the political ramifications of a potential second term for President Trump, as well as economic concerns surrounding China and Germany’s political uncertainty. Volkswagen (ETR:VOWG_p), Bayer (ETR:BAYGN), Deutsche Post (ETR:DHLn), BMW (ETR:BMWG), and Mercedes-Benz were among the worst performers, with declines ranging from 1.40% to 1.70%.

In Asia, the Japanese stock market also faced losses, with the Nikkei 225 Index falling 1.66% to close at 38 722, and the broader Topix Index down 1.21% to 2 708. The retreat was largely in line with global trends, as investors took a breather following the recent rally. Meanwhile, Japan's producer prices rose at their fastest pace in 14 months in October, indicating ongoing inflationary pressures. The country’s 10 trillion-yen stimulus plan for AI chipmakers, designed to strengthen critical supply chains amid US-China trade tensions, remained in focus.

China’s stock market, in contrast, saw a modest rebound, with the Shanghai Composite rising 0.51% to 3 439 and the Shenzhen Component up 0.40% to 11 359. Despite early losses, sentiment improved following news of US President-elect Trump’s appointments of China hawks to key cabinet positions. Investors remained on edge regarding the economic outlook in China, with weak data and a disappointing stimulus package weighing on sentiment. However, Japanese investment bank Nomura upgraded its Q4 growth forecast for China to 4.90%, citing signs of improving economic activity.

In the commodities markets, WTI crude oil futures saw a slight recovery, rising above $68 per barrel, supported by tightening short-term supply. Gold, meanwhile, edged up above $2 610 per ounce, continuing its rebound after a report indicated that inflationary pressures remain persistent, but within expected levels.



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