Global markets delivered a mixed performance on Wednesday as investors weighed cooling inflation signals, trade tensions, and shifting political dynamics. Optimism around AI growth and stimulus hopes in China supported sentiment, but weakness in miners and tariff risks capped gains.
Wall Street mixed as Oracle soars, inflation cools, and rate cut bets build
US stocks ended mixed on Wednesday as Oracle’s strong cloud forecast sparked AI optimism, lifting shares +35.8% despite an earnings miss, with investors betting the long-awaited AI infrastructure boom is gaining momentum. The S&P 500 gained +0.3%, the NASDAQ was flat after record highs, and the DOW fell -0.4%. Wholesale inflation came in cooler than expected, with producer prices declining month on month versus forecasts for a +0.3% rise, setting the stage for next week’s CPI release and reinforcing expectations that the Federal Reserve will cut rates following weak labour market data. On the geopolitical front, tensions rose as President Trump urged the EU to impose new 100% tariffs on India and China to pressure Russia into Ukraine war talks, while NATO member Poland shot down Russian drones that entered its airspace. In rates markets, the US two-year yield was unchanged at 3.544%, while the 10-year yield fell -3bp to 4.045%.
Tariff battles and French politics stall European market momentum
European stocks ended mixed on Wednesday as investors weighed US inflation data, trade tensions, and political changes in France. The STOXX 600 was flat, Germany’s DAX fell -0.4%, the UK’s FTSE 100 shed -0.2%, while France’s CAC 40 gained +0.2% despite protests over the appointment of new Prime Minister Sébastien Lecornu. Market sentiment was further pressured by reports that President Trump urged the EU to impose tariffs of up to 100% on China and India. On the corporate front, Associated British Foods plunged -13.2% on weak Primark sales in Europe, while Novo Nordisk rose +3.7% after announcing plans to cut 9,000 jobs.
China inflation drop lifts markets, while lithium losses hit miners
Asian markets closed broadly higher on Wednesday, lifted by a larger-than-expected drop in China’s consumer prices that revived hopes for fresh stimulus. China’s Shanghai Composite edged up +0.1% as investors bet weak inflation would spur pro-growth measures. Japan’s Nikkei 225 gained +0.9%, led by a 7.3% surge in SoftBank and strong advances in the electricals sector. Elsewhere, Hong Kong’s Hang Seng added +1.0% and South Korea’s Kospi jumped +1.7%. Australia’s ASX 200 rose +0.3%, with gains in the big banks and most sectors offsetting sharp declines in miners. Heavy losses in lithium producers dragged the materials sector lower after Chinese battery maker CATL (-1.2%) restarted its Jianxiawo mine early, sending Liontown Resources down -18.4%, Pilbara Minerals -17.3%, IGO -14.0%, and Mineral Resources -6.3%. Major iron ore miners also weakened, with Fortescue -2.4%, Rio Tinto -2.0%, and BHP -1.2%. In New Zealand, the NZX 50 fell -0.2%.
Oil, Gold, and Iron Ore rise
WTI crude climbed +1.8% to US$63.77/bbl, while gold lifted +0.5% to US$3,644.87/oz. Iron ore also rose +1.1% to US$106.08.
NZ Headlines
Briscoe Group (BGP), the NZX-listed retailer that owns Briscoes Homewares, Rebel Sport, and Living & Giving, reported a 12% decline in net profit after tax to NZ$29.3 million. Despite this drop, the company does not anticipate needing to use its multimillion-dollar funding facility this year, as it has sufficient cash reserves.
KiwiSaver funds under management rose 10.1% to NZ$123.1 billion in the year to March, supported by NZ$12.2 billion in contributions and NZ$6.4 billion in investment returns. Government contributions totalled NZ$1 billion, while employers added NZ$3.4 billion, making up 8% and 28% of total contributions. Meanwhile, fees across the country’s 38 KiwiSaver schemes increased 10% to NZ$868.5 million, according to the FMA’s annual report.
New Zealand’s economy is expected to have weakened in the June quarter, with forecasts pointing to a possible contraction. ANZ now projects a -0.4% decline, worse than both earlier predictions and the RBNZ’s -0.3% estimate, citing weaker-than-expected data. Manufacturing and services sectors showed notable weakness, while global uncertainty and US tariff escalations further weighed on economic activity.
Signature Homes’ CEO Paul Bull said the housing market remains weak and is expected to stay subdued through the year, though demand from first-home buyers is emerging. The company completed around 400 fewer homes than last year, down from its 2022 pandemic peak of about 840 builds, when it was the second-busiest franchise builder after GJ Gardner Homes.
Today's Events
- US PPI