US markets close higher despite late-session pullback

Asian Pacific stock indices closed out the week largely in the red, giving back earlier gains as global risk sentiment cooled. Hong Kong’s Hang Seng and Japan’s Nikkei index led the declines, with both ending down 1.2%, reflecting a combination of profit-taking and concerns over the durability of the US rally.

The Australian ASX 200 eked out a modest gain of 0.3%. The tariff-related volatility and lingering questions over China-US trade relations remained front of mind for investors, curbing risk appetite going into the weekend.

European stock indices opened Friday on a firmer footing, supported by positive sentiment out of Wall Street, reflecting US gains after yesterday’s European close. The German DAX continued to push back above the psychologically significant 24,000 level and hovered within easy reach of yesterday’s record intra-day high.

Source: TN Trader

While trading was subdued at first, the broader tone remains constructive. Investors have now turned their attention toward upcoming US inflation data.

South African markets responded positively after the South African Reserve Bank (SARB) unexpectedly cut the repo rate by 25 basis points to 7.25%, a move unanimously backed by the Monetary Policy Committee. 

With inflation consistently below the SARB’s 3%–6% target range, the central bank also signalled a shift toward a lower long-term inflation target. The rand held steady, while local bonds and equities strengthened as investors began to price in the potential for further easing later this year.

Despite the supportive rate move, the SARB downgraded its 2025 growth outlook to 1.2% from 1.7%, citing subdued global demand and uncertainty surrounding US trade policy. Inflation forecasts were also revised lower on the back of a stronger rand and softer global oil prices. 

While the cut should ease conditions for consumers and businesses, economic activity remains sluggish. Pressure is mounting from weak manufacturing and mining data and persistent unemployment.

In the FX market, the US dollar reasserted itself, making back a proportion of yesterday’s losses. The dollar strengthened on the back of tariff-related developments and as traders positioned themselves ahead of the Core PCE inflation print due later today. The euro slipped against the dollar while the GBP/USD fell back below 1.3500.

Source: TN Trader

The Japanese yen was a touch firmer across the board following a slightly stronger-than-expected inflation print.

Gold prices closed above $3,300 on Thursday but slipped back below here early this morning. Gold prices have traded roughly within $3,250 and $3,350 for over a week now. 

Gold has had a stunning bull run, boosted recently by investor risk aversion and the desperation to find alternative safe havens. But it is now struggling to find direction as the US dollar finds a firmer footing, and on recovering risk appetite.

Source: TN Trader

Silver mirrored the move in gold, trading lower and continuing to underperform relative to its bigger counterpart.

Source: TN Trader

Crude oil prices continue to trade in a range. Front-month WTI continues to find support around $60 per barrel. This is despite yesterday’s inventory data showing a larger-than-expected draw of nearly 3 million barrels. Prices continue to struggle to make significant upside progress.

Source: TN Trader

Natural Gas prices steadied in overnight trading. After a sharp drop earlier in the week, the market appears to be in a holding pattern, lacking clear drivers in either direction. The 320–360 BTU range remains intact for now, with neither bulls nor bears able to seize control.

Bitcoin has fallen steadily over the past week, pulling back from the all-time high hit last Thursday. Earlier this morning, Bitcoin was approaching levels seen earlier this month, retesting an area which previously formed through consolidation after a big move higher. 

Ether - often the recent outperformer - was also muted. But it continues to consolidate above $2,500. Traders appear to be waiting for a new catalyst to drive the next leg of the move.

The VIX, Wall Street’s primary equity market volatility gauge, held around 20.00. The index remains elevated, a reflection of the persistent uncertainty surrounding tariffs and inflation. The steady reading suggests markets are uneasy but not panicked as traders continue to navigate headline-driven swings.

The PCE Price Index, the Federal Reserve’s preferred inflation gauge, takes centre stage on Friday’s economic calendar. With markets already jittery from tariff confusion and central bank rhetoric, a hotter-than-expected reading could reignite debate over the Fed’s next move. Conversely, a softer print may offer breathing room to both policymakers and investors.

Treasury Secretary Bessent noted that US-China trade talks remain stalled, adding that progress now likely depends on direct engagement between Presidents Trump and Xi.

Meanwhile, Federal Reserve Chair Powell reiterated that the central bank’s decisions remain independent and not politically motivated—a reminder of the Fed’s delicate balancing act amid mounting political pressure.

Thursday was a case study of how swiftly sentiment can shift. Early gains were sold into, with the day’s strong start unravelling as tariff headlines reversed course yet again. While the month of May has delivered robust gains across US indices, Friday presents a new test in the form of inflation data and lingering policy concerns.

The bulls are in control for now, but they’re heading into the weekend with one eye firmly on the newswires. If the PCE print delivers a surprise or trade tensions re-escalate, markets could be in for another twist before the month is out.