Author: Fiona Craig

U.S. equity futures traded modestly higher on Tuesday as markets headed into the final trading session of both the second quarter and the first half of the year. Investors are monitoring reports of potential negotiations between the United States and Iran, while a busy economic calendar and Nike’s quarterly earnings are also in focus.

Markets prepare for quarter-end trading

At 03:10 ET (07:10 GMT), futures on the Dow Jones Industrial Average were up 39 points, or 0.1%. S&P 500 futures gained 7 points, or 0.1%, while Nasdaq 100 futures advanced 67 points, or 0.2%.

Wall Street closed higher on Monday, led by a recovery in technology shares after concerns over artificial intelligence infrastructure spending weighed on the sector last week. Semiconductor stocks rebounded around 3.8%, recovering from their weakest weekly performance since April last year.

The rally allowed the S&P 500 to end a five-session losing streak and left the index on course for its strongest quarterly gain since the post-pandemic recovery.

Investor confidence also improved after the U.S. Supreme Court ruled that Federal Reserve Governor Lisa Cook could remain in office while legal proceedings continue regarding efforts by the Trump administration to remove her. The decision helped reduce concerns over the Fed’s political independence.

Possible U.S.-Iran meeting remains in focus

Attention has shifted to Qatar after President Donald Trump said U.S. representatives would meet Iranian officials there.

CNN reported that special envoy Steve Witkoff is travelling to Qatar, although Iranian authorities insist that no formal negotiations have been scheduled in the coming days.

According to Axios, Witkoff and Jared Kushner will meet Qatari officials, while technical delegations from both the United States and Iran are expected to hold separate discussions with mediators from Qatar and Pakistan. An Iranian expert delegation is also expected to arrive in Doha later this week.

The diplomatic activity follows reports that Washington and Tehran have agreed to halt attacks in the Strait of Hormuz. Brent crude was trading around US$73.38 a barrel after falling back to levels seen before the recent conflict.

Economic releases take centre stage

Investors are also awaiting a series of important U.S. economic reports.

Tuesday’s focus will be the May JOLTS job openings report, with economists forecasting vacancies to decline to 7.28 million from 7.618 million in April.

The Conference Board’s consumer confidence survey will also be released later in the session.

These reports are expected to provide additional insight ahead of Friday’s closely watched non-farm payrolls report, which could influence the Federal Reserve’s interest rate outlook.

Nike results expected after the close

Nike (NYSE:NKE) is due to report quarterly earnings after the closing bell, with investors looking for further signs that Chief Executive Elliott Hill’s turnaround strategy is gaining momentum.

In March, Nike warned that quarterly sales would decline by between 2% and 4%, reflecting weaker demand across China, Europe, the Middle East and Africa.

Earlier this month, the company appointed David Denton as Chief Financial Officer. Hill described him as a “proven public-company CFO who knows how to help great consumer brands operate with discipline and invest to win.”

Chinese factory activity improves

Official figures released on Tuesday showed that China’s manufacturing sector expanded slightly faster than expected in June.

The official manufacturing PMI rose to 50.3 from 50.0 in May, exceeding forecasts of 50.2.

Export demand remained the main driver of growth, although analysts believe the recent boost could fade as geopolitical tensions ease and oil markets stabilise.

FTSE 100 and European markets opened higher as Sainsbury’s and Saga updated investors while Brent crude eased and Bitcoin strengthened.

Market Overview

UK and European markets opened higher at the start of the new trading week. The FTSE 100 edged up to 10,484.31, the Euronext 100 gained 0.03 per cent to 1,901.55, and Germany’s DAX advanced 0.73 per cent to 24,815.22. Overnight, the Nasdaq closed higher at 25,820.15 and the S&P 500 finished at 7,440.43, as investors balanced stronger UK GDP data against ongoing uncertainty surrounding US-Iran negotiations, while attention also turned to central bank speeches and economic data due later this week.

Commodity markets reflected easing geopolitical concerns. Brent crude slipped as renewed US-Iran talks reduced worries over supply disruption through the Strait of Hormuz, while copper and gold also traded lower. Natural gas edged lower, Bitcoin fell against sterling, and sterling was broadly firmer against the euro, Swiss franc, US dollar and Australian dollar, while weakening against the Japanese yen.

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Market Numbers

FTSE 100: Up (+0.001%), 10,484.31

Euronext 100: Up (+0.03%), 1,901.55

DAX: Up (+0.73%), 24,815.22

NASDAQ: Up, 25,820.15

S&P 500: Up, 7,440.43

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In the Headlines

Trading update – Sainsbury’s (LSE:SBRY)

Sainsbury’s reported continued growth in grocery sales and market share while maintaining its full-year profit guidance. The update suggests resilient consumer demand and supports confidence in the supermarket group’s outlook despite a competitive retail environment.

Positive momentum – Saga (LSE:SAGA)

Saga said trading remains in line with expectations as growth in its travel business and progress with its long-term Ageas insurance partnership helped reduce debt and strengthen the balance sheet. The update reinforces management’s confidence in meeting full-year guidance.

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Currencies (vs GBP)

USD: Down (-0.02%), $1.3253

CHF: Down (-0.01%), Fr.1.0706

EUR: Down (-0.06%), €1.1606

JPY: Up (+0.06%), ¥214.599

AUD: Down (-0.03%), $1.9259

Bitcoin (BTC/GBP): Down, £44,891.13

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Commodities

Copper: Down

Gold: Down

Brent Crude: Down

Natural Gas: Down

European equities traded higher on Tuesday, putting the STOXX 600 on course for its best quarterly performance in more than five years as investor enthusiasm for artificial intelligence and easing geopolitical tensions in the Middle East continued to support market sentiment.

The pan-European STOXX 600 rose 0.6% to 639.77 points by 08:04 GMT. The benchmark index is set to record its third consecutive monthly advance and has gained 9.7% during the quarter, marking its strongest quarterly return since October 2020.

Technology sector drives rally

Technology shares climbed 1.7% and were on track to deliver their strongest quarterly performance since October 2001, reflecting sustained demand for artificial intelligence infrastructure. The sector is also on course to outperform its US technology peers over both the month and the quarter.

Among the leading gainers, semiconductor equipment manufacturer ASML (EU:ASML) advanced 3.33%, while chipmakers STMicroelectronics (BIT:STMMI) and Infineon (TG:IFX) rose 3.0% and 2.7%, respectively.

Siemens Energy extends gains

Shares in Siemens Energy (TG:SIE) gained 5% after the company reaffirmed robust demand for AI-related equipment during its pre-close quarterly trading update on Monday.

Investor sentiment has also been supported by signs of easing tensions in the Middle East, with oil prices retreating to levels seen before the conflict involving Iran, helping reduce energy cost concerns across Europe.

Healthcare sector boosted by Abivax

In the healthcare sector, Abivax (EU:ABVX) surged more than 20% after announcing positive topline results from its obefazimod clinical study.

The broader European healthcare sector rose 0.9% during the session.

European equity markets traded higher on Tuesday and remained on course to post strong gains for the quarter, with investors focusing on a busy calendar of economic releases and speeches from senior central bank officials scheduled later in the day.

The pan-European STOXX 600 gained 0.4% in early trading, putting the benchmark on track for a quarterly rise of 9.7%.

Germany’s DAX climbed 0.8%, while London’s FTSE 100 added 0.2% and France’s CAC 40 rose 0.3%. Italy’s FTSE MIB advanced 0.4%.

Italian equities outperform regional peers

Italian shares were set to deliver the strongest quarterly performance among Europe’s major markets, supported by significant gains in banking stocks following a wave of merger and acquisition activity over the past three months.

By comparison, the UK’s FTSE 100 continued to lag other European indices as investors remained cautious over Britain’s widening fiscal deficit and the government’s efforts to stimulate economic growth.

European markets have also underperformed their counterparts in the United States and Asia during the quarter, largely reflecting the region’s smaller exposure to large-cap technology companies.

Strong valuations across technology and artificial intelligence stocks helped lift both US and Asian equity markets to record highs earlier this year, despite heightened geopolitical tensions involving the United States and Iran.

Markets await Sintra speeches and key economic data

Attention is now turning to the European Central Bank’s annual forum in Sintra, Portugal, where policymakers are expected to provide further guidance on the outlook for interest rates.

Investors will closely monitor remarks from ECB Chief Economist Philip Lane, together with Executive Board members Isabel Schnabel and Frank Elderson, for fresh signals on the future direction of eurozone monetary policy.

The conference will conclude with a closely watched panel discussion featuring newly appointed Federal Reserve Chair Kevin Warsh, making his first major international appearance since taking office, alongside Bank of England Governor Andrew Bailey.

Maersk gains after raising outlook

Among individual stocks, shares in Maersk (TG:DP4A) rose around 3% after the shipping group upgraded its full-year earnings guidance.

UK equities traded higher on Tuesday after official figures confirmed stronger first-quarter economic growth, helping to support investor sentiment despite continued uncertainty surrounding potential negotiations between the United States and Iran.

The FTSE 100 rose 0.16% in early trading, while Germany’s DAX gained 0.80% and France’s CAC 40 advanced 0.33%. Sterling edged 0.05% lower against the US dollar, with GBP/USD trading at 1.3245.

UK economy expands in first quarter

Fresh economic data showed the UK economy grew by 0.6% during the first quarter of 2026, matching both the preliminary estimate published in May and market expectations. The expansion accelerated from the revised 0.1% growth recorded in the previous quarter.

Growth was broad-based across the economy, led by the services sector, which expanded by 0.8%. Annual GDP growth for 2025 was revised down slightly to 1.3% from 1.4%.

Despite stronger headline growth, household finances weakened during the quarter. Real household disposable income per person fell 0.8%, while the household saving ratio declined to 8.9% from 9.6%.

Mixed signals over Iran-US negotiations

Geopolitical uncertainty remained in focus as conflicting statements emerged over potential talks between Washington and Tehran.

US President Donald Trump said discussions with Iran were taking place in Qatar on Tuesday, with envoy Steve Witkoff travelling to Doha. However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei denied that any talks with the United States were scheduled in the coming days, although he confirmed that a technical delegation would visit Doha later in the week.

Baghaei added that negotiations had not yet reached the stage of drafting a final agreement, echoing earlier comments from Iranian negotiator Kazem Gharibabadi, who also denied that technical negotiations had been arranged.

Meanwhile, White House press secretary Karoline Leavitt said Witkoff and Jared Kushner would travel to Doha for high-level discussions, with technical meetings expected alongside the talks.

Differences also emerged over the clearance of mines in the Strait of Hormuz. French President Emmanuel Macron said France and Oman would work with international partners on demining operations, while Iran’s deputy foreign minister insisted Iran would carry out the work independently. Shipping through the strategic waterway remains well below pre-conflict levels.

Iranian President Masoud Pezeshkian said Tehran would honour its commitments if the United States did the same, while warning it would respond firmly to any threats. He also said half of Iran’s US$12 billion in frozen assets held in Qatar would be returned, although US officials have offered differing accounts.

In Lebanon, Parliament Speaker Nabih Berri said the US-brokered agreement with Israel “won’t be implemented,” as clashes between Hezbollah and Israeli forces continued despite the recently announced ceasefire.

Commodities ease

Oil prices moved lower during the session, with Brent crude falling 0.51% to US$73.53 a barrel and West Texas Intermediate declining 0.62% to US$70.31. Gold prices edged higher, with gold futures gaining 0.10% to US$4,043.02 an ounce and spot gold rising 0.31% to US$4,029.22.

UK corporate highlights

Among UK-listed companies, Shell (LSE:SHEL) said global demand for liquefied natural gas could increase by 65% by 2050 to almost 700 million metric tonnes a year, supported by rising energy demand across Asia and the growth of power-hungry data centres.

Meanwhile, J Sainsbury (LSE:SBRY) reported first-quarter like-for-like sales growth of 2.1%, slightly below market expectations and the previous quarter, while maintaining its full-year profit guidance.