US Federal Reserve Outlook Shapes Global Markets Amid Middle East Tensions

Global equity and currency markets are balancing signs of a slowing US economy with heightened geopolitical risk. US ISM Services PMI slipped to 54.0 in June, indicating continued expansion but weaker growth, while renewed attacks on commercial shipping in the Strait of Hormuz have lifted oil prices and boosted demand for safe‑haven assets. Investors await the Federal Reserve’s June meeting minutes for clues on future rate policy, which could affect US Treasury yields and global risk sentiment.

In the equities arena, artificial‑intelligence‑linked stocks have underperformed, pulling down Asian markets despite a rally in Hong Kong after JPMorgan upgraded Tencent’s AI agent prospects. The Nikkei fell 0.31% and the ASX 200 slipped 0.17%, while the Hang Seng rose 0.78%. European indexes posted modest gains, with the FTSE 100 up 0.2% and the Euro Stoxx 50 up 0.82% to a record high.

South Africa’s JSE closed higher, driven by strong resources and financials, and a 0.96% rise in the All‑Share Index. The uplift was supported by domestic business sentiment, a June PMI back in expansion, and easing oil prices that reduced inflation concerns. The rand remains supported by global risk appetite, though its strength is considered externally driven.

Overall, market participants are gauging the interplay between US monetary policy signals, Middle‑East shipping disruptions, and sector‑specific pressures from AI‑related valuations.