As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Markets stabilised on Tuesday as hopes for a temporary U.S.-Iran ceasefire helped oil retreat from its latest spike and brought buyers back into beaten-down semiconductor shares. South Korea’s KOSPI rallied sharply after weeks of forced selling, while European technology stocks also recovered. The relief remained conditional. Energy markets are still pricing serious disruption risk, Treasury yields are elevated and this week’s U.S. technology earnings must now prove that AI demand can still carry valuations in a less forgiving macro environment.
In Asian Equity Markets stocks rebounded as investors responded to reports that Iran had received a proposal for a 10-day ceasefire. South Korea’s KOSPI rose nearly 5 percent, led by the same chipmakers that had been hit hardest during the July selloff. The move was powerful but not yet conclusive. The index remains sharply lower for the month, while worries around AI valuations, profit growth and capital spending continue to hang over the sector ahead of major U.S. technology earnings.
In European Equity Markets stocks moved higher as technology and mining shares offset the continuing concern around energy prices. The pan-European STOXX 600 advanced, with semiconductor suppliers including ASML and ASMI among the stronger performers. Miners also benefited from firmer metals prices. The rally looked more like a recovery from oversold conditions than a clean return to risk appetite, especially with the European Central Bank meeting still ahead and energy-sensitive sectors exposed to another oil move higher.
In U.S. Equity Markets futures were firmer as investors prepared for the next round of earnings from large technology companies. Alphabet, Intel, Tesla and several other major names are due to report this week, making the results important for the wider AI trade. The market no longer needs companies to prove that AI demand exists. It needs evidence that revenue growth, margins and cash generation can justify the scale of spending already priced into valuations.
In Commodities Markets oil remained the main cross-asset variable. Brent had eased earlier on ceasefire hopes, but the broader supply backdrop stayed fragile. Houthi threats against Saudi-linked shipping opened a potential second disruption point beyond the Strait of Hormuz, while reports of tanker rerouting in the Red Sea kept the market focused on physical flows. Brent around the low-$90 area is high enough to revive inflation concern and pressure transport, consumer and energy-importing economies.
In Currency Markets the dollar remained supported by higher yields and defensive demand. The dollar index traded near 101, while the euro held close to $1.14. The yen stayed under pressure, with USD/JPY still near historically stretched levels. The yen’s problem is becoming more uncomfortable because higher oil raises Japan’s import bill while U.S. rate differentials continue to favour the dollar. Intervention risk remains present, but it has not yet changed the underlying currency trend.
In Bond Markets Treasury yields stayed elevated as investors weighed softer recent U.S. inflation data against renewed oil pressure. The U.S. 10-year yield remained near the mid-4.6 percent area, keeping financial conditions tight for long-duration growth assets. The bond market is not treating the latest oil shock as a full inflation reset yet, but it is also not giving equities much room for disappointment. Earnings now need to do more of the stabilising work.
The Cross-Asset Read
Tuesday’s rebound was useful, but it did not change the hierarchy of risks.
Oil is still setting the terms for the equity market.
The chip rebound matters because it shows investors are willing to buy weakness when energy pressure eases. KOSPI’s move also suggests some of the forced selling in AI-linked positions may be slowing. That helps sentiment heading into Alphabet, Intel and Tesla.
The harder part is that energy risk has not disappeared. The market is now dealing with disruption risk around both Hormuz and the Red Sea. That makes every ceasefire headline important and every new shipping incident capable of changing the inflation path again.
The key flag is Brent at $92 and the U.S. 10-year yield at 4.65 percent. If Brent holds below $92 and the 10-year stays below 4.65 percent, earnings can still support a broader rebound. A sustained move above both would make the recovery harder to trust, even if technology results are solid.
The AI trade found buyers today.
The oil market still has the final vote.
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