Wall Street edges to fresh highs as rand strengthens to five-month best

Global markets pushed further into positive territory on Tuesday, with US equities extending gains ahead of Nvidia's closely watched earnings, gold holding near three-month highs, and the rand strengthening to its firmest level since the Middle East conflict began.

Wall Street builds on Monday's gains

US stocks closed higher on Tuesday as falling oil prices eased pressure on bond markets and supported risk appetite. The S&P 500 rose 0.3% to 7,677.28, edging closer to the record high it set earlier this month. The Nasdaq Composite advanced 0.7% to 26,151.30, while the Dow Jones Industrial Average added 0.3% to 53,577.40, marking its third consecutive winning session.

Attention on Wall Street is now firmly fixed on Nvidia, which reports earnings after Wednesday's closing bell in a result widely seen as a test of whether AI infrastructure spending can keep pace with elevated chip valuations. Shares are up more than 13% for the year despite the recent volatility in the sector.

Adding to the geopolitical backdrop, Canada announced retaliatory tariffs on roughly $20 billion of US goods, set to take effect on 8 September, in response to fresh US tariffs on Canadian vehicles, alcohol and dairy products.

Gold holds near three-month highs

Gold traded around $4,650 an ounce, close to its strongest level in more than three months, as continued US government intervention in bond markets revived the so-called “debasement trade” that fuelled a 65% rally in the metal during 2025. The US Treasury's expanded buyback programme for long-dated government debt, alongside comments from Treasury Secretary Scott Bessent suggesting buybacks could increase further, has kept demand for gold as a safe-haven asset elevated. Markets are now watching Wednesday's July PCE inflation data and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday for clues on the interest-rate outlook.

Rand firms to five-month high

The rand strengthened to around R15.93 to the dollar on Tuesday, its strongest level since the Iran conflict began in late February, supported by broad dollar weakness, elevated gold prices and stronger appetite for emerging-market assets. The currency has now gained close to 5% over the past month.

The rand held its ground even after the South African Reserve Bank reported that its composite leading business cycle indicator fell 1.4% month-on-month in June, its third straight monthly decline. Local inflation eased to 4.3% in July from 5% in June, though core inflation rose for a fifth consecutive month to 4.2% – its highest level since July 2024 – leaving the disinflation picture mixed ahead of the SARB's next policy decision on 23 September.

Local focus

With gold holding firm and the rand at multi-month highs, sentiment on the JSE is likely to stay supportive for dual-listed and resources counters with dollar-denominated earnings. Attention locally also turns to Sasol's results, due on 1 September, and to Wednesday's Nvidia earnings for cues on how global risk appetite for AI-linked and technology counters may spill over into local markets.

SOURCES: Reuters, CNBC, Trading Economics, Kitco.