Category: Market Summary

AI optimism lifts European equity markets

European markets traded higher on Tuesday, supported by a strong recovery in technology stocks as investor confidence in artificial intelligence-related companies improved.

With oil prices retreating to levels seen before the recent Middle East conflict, investors continue to expect that the European Central Bank (ECB) will be able to keep interest rates unchanged in the near term.

Speaking in Sintra, Portugal, ECB Chief Economist Philip Lane said the secondary effects of higher energy prices are likely to take time to emerge and indicated policymakers are not prepared to commit to a specific interest-rate path.

Falling oil prices support market sentiment

Crude oil prices extended their decline and remained on course for a second consecutive monthly loss, despite conflicting comments over whether the United States and Iran would hold talks in Qatar on Tuesday.

Among the major European indices, Germany’s DAX rose 1.3%, the UK’s FTSE 100 gained 0.8%, and France’s CAC 40 advanced 0.2%.

Sterling gave back earlier gains against the U.S. dollar after revised figures from the Office for National Statistics confirmed the UK economy expanded as initially estimated during the first quarter, driven largely by the services sector.

The economy grew 0.6% quarter-on-quarter in the first three months of the year, following revised growth of 0.1% in the fourth quarter.

Technology sector outperforms

Technology shares were among the strongest performers, with Infineon (TG:IFX), STMicroelectronics (BIT:STMMI) and ASML Holding (EU:ASML) posting solid gains.

Elsewhere, French pharmaceutical company Sanofi (EU:SAN) traded little changed after reporting that Nexviazyme achieved all primary and secondary endpoints in a Phase III trial involving the infantile form of Pompe disease.

British travel and insurance group Saga (LSE:SAGA) declined after stating that trading remained “in line with expectations” during the first four months of the year.

Meanwhile, supermarket operator J Sainsbury (LSE:SBRY) advanced after reaffirming its full-year profit guidance.

International Workplace Group (LSE:IWG) also moved sharply higher after announcing a $50 million increase to its 2026 share buyback programme.

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.

European equity markets were mixed on Monday, with technology stocks providing support after South Korea unveiled a US$576 billion investment programme aimed at strengthening its leadership in semiconductors and artificial intelligence, backed by Samsung and SK Hynix.

Germany’s DAX gained 0.1%, while the UK’s FTSE 100 hovered around the flatline. France’s CAC 40 underperformed, slipping 0.6%.

Energy markets also remained in focus, with crude oil prices edging higher following renewed tensions between the United States and Iran ahead of upcoming peace negotiations in Qatar.

Technology Stocks Lead Market Gains

Semiconductor-related shares outperformed across Europe, with ASML Holding (EU:ASML), Infineon (TG:IFX) and STMicroelectronics (BIT:STMMI) (EU:STMPA) advancing between 1% and 3%.

Among individual movers, Nordex Group (TG:NDX1) climbed around 1% after the German wind turbine manufacturer secured a 325-megawatt project in the United States.

Dutch technology investor Prosus N.V. (EU:PRX) rose 2.4% after reporting an 84% increase in full-year adjusted core profit.

French pharmaceutical group Ipsen (EU:IPN) gained 1.7% after announcing an agreement to acquire U.S.-based Kartos Therapeutics in a transaction valued at up to US$1.75 billion.

Meanwhile, BT Group (LSE:BT.A) added around 1% after reaching an agreement with Verizon (NYSE:VZ) to combine their international operations through a new joint venture.

FTSE 100 edges lower as BT and Verizon unveil a global venture, Smiths News secures a major contract and Brent crude remains in focus.

Market Overview

UK markets opened little changed, with the FTSE 100 easing marginally after the previous session, while European trading was mixed. The FTSE 100 slipped 0.00 per cent to 10,507.83, the Euronext 100 gained 0.06 per cent to 1,898.60 and Germany’s DAX advanced 0.17 per cent to 24,724.34. Overnight, the Nasdaq closed lower at 25,297.62 and the S&P 500 finished slightly down at 7,354.02. Investors continued to monitor developments in the Middle East alongside corporate news including BT’s strategic partnership with Verizon.

Commodity markets reflected ongoing geopolitical caution. Brent crude edged higher as traders assessed renewed US-Iran tensions and developments involving Qatar, while copper softened and gold was little changed. Against sterling, the US dollar strengthened slightly, while the euro and Swiss franc were broadly steady and the Japanese yen weakened. Bitcoin traded slightly higher versus the pound.

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Market Numbers

FTSE 100: Down, 10,507.83
Euronext 100: Up (+0.06%), 1,898.60
DAX: Up (+0.17%), 24,724.34
NASDAQ: Down, 25,297.62
S&P 500: Down, 7,354.02

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In the Headlines

Global telecoms venture – BT Group (LSE:BT.A)
BT and Verizon will combine their international enterprise businesses into a 50:50 joint venture with around $4 billion in annual revenue. The deal is intended to strengthen global connectivity services for multinational customers while allowing both companies to focus more closely on their domestic markets.

Distribution contract – Smiths News (LSE:SNWS)
Smiths News has secured a long-term agreement to continue distributing Associated Newspapers titles. The contract provides greater revenue visibility and reinforces the company’s position within the UK newspaper distribution market.

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Currencies (vs GBP)

USD: Down (-0.01%), $1.3197
CHF: Down (-0.01%), Fr.1.0690
EUR: Up (+0.00%), €1.1591
JPY: Up (+0.01%), ¥213.511
AUD: Up (+0.01%), $1.9136
Bitcoin (BTC/GBP): Up (-0.33%), £45,361.59

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Commodities

Copper: Down
Gold: Down
Brent Crude: Down
Natural Gas: Down

European equity markets were broadly subdued on Monday as investors assessed the stability of the temporary ceasefire between the United States and Iran, while firmer oil prices renewed concerns about inflation.

The pan-European STOXX 600 slipped 0.03% to 635.66 points after a volatile trading week that produced only limited gains. Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 were little changed, while Italy’s FTSE MIB eased 0.2%.

Investor sentiment remained cautious following renewed military action between Washington and Tehran over the weekend after an attack on a commercial vessel near the Strait of Hormuz. Although both sides later agreed to suspend further retaliatory strikes ahead of technical talks scheduled for Tuesday in Doha, uncertainty surrounding the situation discouraged investors from taking significant new positions.

Oil prices moved modestly higher as traders continued to monitor the potential impact of disruptions to shipping through the strategically important Strait of Hormuz. The renewed focus on geopolitical tensions and energy-driven inflation followed last week’s technology-led market weakness, when concerns over elevated valuations weighed on artificial intelligence-related stocks across global markets.

Attention is now shifting towards a busy week of economic events. Investors are awaiting the latest U.S. non-farm payrolls report, which is expected to play a key role in shaping expectations for Federal Reserve policy and whether markets continue to anticipate two additional 25-basis-point interest rate increases before year-end.

In Europe, June readings for consumer confidence and business sentiment are also due later in the day. Market participants will closely follow comments from European Central Bank President Christine Lagarde at the opening of the ECB’s Sintra Forum, looking for further guidance on the outlook for Eurozone interest rates, with markets currently expecting at least one additional ECB rate increase this year.

Among individual stocks, Nagarro (TG:NA9) surged 90% after receiving takeover approaches, while Prosus (EU:PRX) gained 2% following the release of its full-year financial results.

UK equities opened lower on Monday despite signs of easing tensions between the United States and Iran, while investors also digested fresh comments from the Bank of England and developments in UK politics. The FTSE 100 fell 0.20%, while Germany’s DAX rose 0.18% and France’s CAC 40 slipped 0.16%. Sterling strengthened 0.13% against the US dollar to 1.3220 as of 03:23 ET (07:23 GMT).

J.P. Morgan lifted its year-end target for the FTSE 100 to 11,000 from 10,300, implying around 5% upside from the index’s current level of 10,508.

Bank of England Chief Economist Huw Pill warned that policymakers must remain focused on bringing inflation back to target, following May’s Consumer Prices Index reading of 2.8%.

“I think it should be seen as problematic, because our mandate is very clear; inflation at 2% at all times,” Pill said, adding “I do fear a little bit that, because we saw inflation go to 11%, policy discussion becomes, ’oh inflation at 3% is not so bad’.”

Pill, who voted for a rate increase at the Bank’s most recent policy meeting, also suggested that monetary policy “hasn’t been restrictive enough over the last few years.”

Meanwhile, Labour leadership frontrunner Andy Burnham is expected to outline plans in Manchester for a wide-ranging devolution agenda centred on reindustrialisation, infrastructure investment, housing and greater decision-making powers for local authorities. The proposals are also expected to include reforms to public procurement aimed at supporting UK employment and measures to reduce youth unemployment.

Geopolitical tensions remained in focus after a US official said Washington and Tehran had agreed to “stand down for now” following renewed exchanges around the Strait of Hormuz over the weekend.

“Both sides will stand down for now and vessels can move freely,” the official said, adding that technical talks on the memorandum of understanding remain “on track.”

The announcement followed renewed military action after US Central Command carried out strikes against Iranian military targets, accusing Tehran of failing to honour the ceasefire following an attack on a tanker near the Omani coast. Iran responded with strikes against US military bases in Kuwait and Bahrain, claiming eight facilities had been targeted and warning that any further breach of the ceasefire “will lead to a complete halt of ongoing processes.”

US President Donald Trump also warned on Truth Social that the United States would “complete the job” if Iran failed to comply, adding that “the Islamic Republic of Iran will no longer exist” should hostilities continue.

Despite the temporary stand-down, uncertainty over shipping through the Strait of Hormuz remains unresolved. Iranian Foreign Minister Abbas Araghchi warned that attempts to bypass Iran’s preferred shipping route would “increase tensions”, while the Islamic Revolutionary Guard Corps said it would continue to oversee traffic through the waterway. Multiple transit routes are now being managed by different authorities, adding to uncertainty for global shipping.

Oil prices edged higher as traders balanced the easing of immediate military tensions against continuing risks to energy supplies. Brent crude rose 0.73%, while WTI gained 0.98%. Gold prices weakened as demand for traditional safe-haven assets eased, with gold futures falling 0.53% to US$4,074.47 per ounce and spot gold declining 0.71% to US$4,060.21.

UK Corporate Round-Up

BT (LSE:BT.A) agreed to combine its international enterprise operations with Verizon (NYSE:VZ) in a 50:50 joint venture expected to generate around US$4 billion in annual revenue. Under the agreement, Verizon will make a US$625 million equalisation payment to BT, while the UK telecoms group also updated its earnings and revenue guidance to reflect the planned separation of its international operations.

Haleon (LSE:HLN) has reportedly submitted a bid for US supplements manufacturer Thorne, according to Reuters. The move would expand Haleon’s presence in the approximately US$70 billion US dietary supplements market. Thorne, which was acquired by L Catterton in 2023 for US$680 million, is understood to have attracted interest from several strategic buyers.

AstraZeneca (LSE:AZN) and its partner Daiichi Sankyo (TG:D4S) received a positive recommendation for European Union approval of Datroway as a first-line treatment for triple-negative breast cancer. The recommendation follows Phase III trial data showing the therapy extended median overall survival by five months compared with chemotherapy.