As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Fading U.S.-Iran ceasefire hopes, oil pushing higher and a sharp pullback in Korea’s AI-led rally shaped the cross-asset tape into Tuesday’s European session.
In Asian Equity Markets stocks traded mixed to lower on Tuesday as investors reassessed the durability of the recent risk rally amid renewed Middle East tension and rising oil prices. South Korea’s KOSPI fell around 3.5 percent after its powerful AI-led surge, dragging on regional sentiment as investors took profit in semiconductor-heavy markets. Japan’s Nikkei still managed a modest gain of around 0.5 percent, while Hong Kong’s Hang Seng and mainland Chinese equities edged lower. Australia also slipped, with higher crude prices and tighter global financial conditions again weighing on oil-importing economies.
In Currency Markets the U.S. dollar strengthened for a second straight session as hopes for a quick U.S.-Iran breakthrough faded and investors moved back into defensive positioning. The dollar index traded around 98.3, while the euro softened toward $1.174. The yen remained under pressure near 157.6 per dollar, even as markets stayed alert to further intervention risk after U.S. and Japanese officials reiterated that excessive currency volatility is undesirable. Sterling was weaker as UK political uncertainty added to pressure on the pound, making it one of the softer major currencies on the day.
In US Equity Markets stocks edged higher on Monday as AI enthusiasm narrowly outweighed renewed concern over stalled U.S.-Iran talks and rising oil prices. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all finished modestly in the green, with the Dow and S&P 500 each rising around 0.2 percent and the Nasdaq adding roughly 0.1 percent. The S&P 500 and Nasdaq closed at fresh record highs, supported by continued strength in chipmakers and other AI-linked names, although the tone was less forceful than during last week’s rally as investors turned their attention toward Tuesday’s U.S. CPI report.
In Commodities Markets oil rose again as the prospect of a near-term resolution to the conflict with Iran deteriorated, keeping supply disruption fears around the Strait of Hormuz firmly in focus. Brent crude climbed to around $106.2 per barrel, while U.S. crude traded near $100.4, putting both benchmarks back at levels that continue to complicate the inflation outlook. Gold moved lower as the stronger dollar and higher yields outweighed geopolitical support, with spot gold down around 0.8 percent near $4,698 per ounce. Silver, platinum and palladium also weakened as the precious-metals complex came under pressure.
In European Equity Markets stocks fell by late morning as fragile Middle East ceasefire hopes, higher oil and political stress in the UK weighed on regional sentiment. The pan-European STOXX 600 dropped around 0.8 percent, with Germany’s DAX and Spain’s IBEX each down roughly 0.9 percent. Financials and industrials were among the weaker sectors, while energy outperformed as crude prices advanced. UK banks came under notable pressure amid rising gilt yields and concern over Prime Minister Keir Starmer’s political position. On the single-stock side, Bayer jumped after stronger earnings, while Intertek gained on takeover interest.
In Bond Markets yields moved higher as investors priced a stickier inflation backdrop driven by elevated energy prices, while UK political uncertainty added a separate stress point in sovereign debt. Benchmark 10-year U.S. Treasury yields hovered around 4.4 percent, roughly 40 bps above pre-war levels, while markets had fully priced out Federal Reserve rate cuts for the year. In Britain, 30-year gilt yields rose to around 5.79 percent, their highest level since 1998, as investor concern over fiscal and political stability intensified. European rate markets also remained under pressure, with traders pricing further ECB tightening risk if the oil shock persists.
