LGT Navigator

Iran hopes and strong earnings from AI-related companies lift stocks

Prospects for reduced tensions with Iran bolstered risk appetite on Tuesday, pushing crude prices lower and helping European and US equities advance. The Dow Jones Industrial Average and S&P 500 reached record highs, while upbeat corporate results reignited enthusiasm for AI-related shares and fuelled particularly strong gains on the Nasdaq. This momentum carried into Wednesday’s Asian session, led by sharp rallies in Japan and South Korea. Attention now turns to global business surveys and the US ADP National Employment Report for further indications of the economic and interest-rate outlook.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Middle East financial markets
© Shutterstock

The US military said on Tuesday that a southern passage through the Strait of Hormuz remained open to commercial shipping, having supported the transit of more than 1000 vessels despite Iranian attacks. US Treasury Secretary Scott Bessent said an agreement with Iran to reopen the waterway could be reached this week, while separate reports indicated that Oman and Iran were nearing a temporary accord mediated by Pakistan. Brent crude oil futures fell 5.3% on Tuesday before declining a further 1% to USD 78.55 per barrel. US Treasury yields were trading lower, with the 2-year yield at 4.2% and the 10-year yield at 4.6%, while the US Dollar Index edged lower to 99.83 points. Gold gained 1.9% to around USD 4150 per ounce, and bitcoin rose 0.8% to around USD 64,400.

Asian stocks rally as AI optimism returns

Asian equities rallied on Wednesday as lower oil prices, falling bond yields and strong US earnings renewed optimism around AI. Japan’s Nikkei 225 climbed 3.5% and Korea’s Kospi gained 4.1%, with semiconductor makers including SK Hynix and Samsung Electronics leading the advance. Mainland China’s CSI 300 rose 1.4%, Hong Kong’s Hang Seng Index added 0.1% and Australia’s S&P/ASX 200 gained 0.9% to 9229.90 points.

US stocks rally as AI fears ease

US equities rose sharply on Tuesday, with the Dow Jones Industrial Average gaining 1.7% to a record 54,085.88 points and the S&P 500 advancing 1.8% to a fresh high of 7736.52 points. The Nasdaq-100 climbed 3.3% to 29,733.16 points. Caterpillar rose 5.6%, while Palantir surged nearly 30% after reporting close to a doubling of quarterly revenue from a year earlier. SpaceX shares fell almost 7% in after-hours trading on Tuesday after the newly listed company reported capital expenditure of USD 18.4 billion in the second quarter, more than six times the level a year earlier and above market expectations.

US job openings remain stable

US job openings were broadly unchanged at 7.4 million in June, according to data released on Tuesday, while the vacancies rate held at 4.4%. Hiring remained at 5.3 million and total separations were steady at 5.4 million, including 3.2 million voluntary departures and 1.8 million layoffs and dismissals. The figures point to a stable but subdued labour market and are unlikely to alter the Federal Reserve’s outlook materially ahead of Wednesday’s US private-payrolls data and Friday’s employment report.

European shares rise on Iran hopes

European equities gained on Tuesday as lower oil prices and renewed hopes for a diplomatic resolution to the Iran war supported risk appetite. The Euro Stoxx 50 rose 1.1% to 6498.25 points, while the Swiss Market Index added 0.6% to 14,463.23 points, after US Treasury Secretary Scott Bessent said talks with Iran could reopen the Strait of Hormuz. Strong earnings from AI-related US companies also lifted technology shares, with ASML gaining 3.7%, while falling crude prices weighed on energy stocks including Eni and TotalEnergies.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from CVS Health, Deutsche Post, Eli Lilly, Glencore, Infineon, Novo Nordisk, Uber, and Walt Disney.

Economic data in focus: Services and Composite Purchasing Managers' Indices from several of the world's largest economies, including Italy (09:45), France (09:50), Germany (09:55), the euro area (10:00), the UK (10:30), the US (15:45) and US Services ISM (16:00); Bank of Japan monetary policy meeting minutes (01:50) and US ADP National Employment Report (14:15).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.