Category: Market Summary

European stock markets traded near historic highs as another round of encouraging corporate earnings helped offset geopolitical uncertainty and mixed economic data. Lower oil prices also provided additional support, improving overall market sentiment.

The STOXX 600 advanced 0.4%, remaining close to record territory as upbeat quarterly results from companies across the healthcare, industrial and logistics sectors reinforced confidence among investors.

Germany’s DAX gained 0.5%, France’s CAC 40 edged 0.1% higher and London’s FTSE 100 added 0.4%.

Falling oil prices and diplomatic progress improve market mood

Energy markets also contributed to the positive tone, with Brent crude declining 1.4%, easing concerns over inflation and helping to reduce pressure on government bond yields.

Investors also welcomed reports of gradual diplomatic progress in the Middle East. Officials in Qatar said mediators continued to move forward in discussions aimed at easing tensions between the United States and Iran, although no detailed agreement has yet been made public.

Despite continued geopolitical uncertainty, solid corporate earnings and improved business outlooks remain the main drivers of European equity markets. Strong performances from sectors such as pharmaceuticals and energy infrastructure have encouraged investors to maintain exposure to equities.

Company earnings dominate trading

Corporate earnings remained the principal catalyst across European markets.

Novo Nordisk A/S (TG:NOV) raised its full-year sales and profit forecasts as demand for its GLP-1 diabetes and weight-loss treatments remained strong worldwide. Despite the improved guidance, the company’s shares fell 3.4%.

Siemens Energy AG (TG:SIE) jumped 5% after reporting third-quarter profit ahead of expectations, benefiting from robust demand for power grid equipment driven by the expansion of artificial intelligence data centres.

DHL Group (TG:DHL) declined 1.7%, even after delivering second-quarter earnings above market forecasts and expanding its share buyback programme.

Heineken NV (EU:HEIA) gained 2.5% after first-half operating profit increased, supported by cost-saving measures, including approximately 3,000 job reductions, which helped offset weaker sales volumes in some markets.

Semiconductor sector remains in focus

Technology stocks also attracted attention after Reuters reported that South Korean memory chip manufacturers SK Hynix Inc. (NASDAQ:SKHY) and Samsung Electronics Co. (USOTC:SSNHZ) are assessing semiconductor manufacturing equipment produced by China’s Advanced Micro Fabrication Equipment Inc., highlighting continued changes across global semiconductor supply chains.

Infineon Technologies (TG:IFX) fell 2.5% following the release of its third-quarter results.

Investors are now looking ahead to the release of the US ADP private payrolls report for July, which is expected to provide further insight into labour market conditions ahead of Friday’s closely watched nonfarm payrolls data.

Artificial intelligence was widely expected to create the biggest opportunities for the companies developing the underlying models. However, recent corporate results indicate that some of Europe’s long-established technology businesses are becoming major beneficiaries as enterprises accelerate AI adoption.

Companies including SAP (TG:SAP), Capgemini (EU:CAP), Sopra Steria (EU:SOP) and OVHcloud (EU:OVH) have all reported improving demand, stronger financial performance or more optimistic guidance as businesses shift from AI experimentation to large-scale implementation.

Integration is becoming the real AI challenge

As organisations expand their use of artificial intelligence, they are discovering that integrating AI into existing systems is proving far more difficult than simply accessing the technology itself.

Rather than depending on a single AI platform, many companies are expected to combine multiple models, selecting different solutions according to performance, security and regulatory requirements. As a result, the key challenge is no longer choosing the best model, but ensuring AI works seamlessly alongside existing software, corporate data and established business processes.

“AI applications are the battleground, and that is where most value will be created,” UBS said in a recent note.

This trend favours Europe’s established software providers, consulting firms and cloud infrastructure companies, whose expertise has long centred on integrating complex enterprise technologies.

Legacy systems create opportunities for technology specialists

Most large organisations operate with decades-old software, fragmented databases and heavily customised applications. Introducing AI into these environments requires systems that can securely access live company data, comply with governance rules, maintain audit trails and integrate into existing employee workflows.

Managing this complexity is becoming one of the biggest barriers to wider AI deployment. According to Boston Consulting Group, AI implementation is advancing faster than companies’ ability to manage it effectively, with more than 70% of investors expressing concern over whether businesses possess the technical and operational capabilities needed to succeed.

As deployment accelerates, spending is increasingly shifting towards implementation, systems integration and governance rather than simply purchasing AI models.

Enterprise software groups benefit from growing investment

SAP reported a 26% increase in its cloud backlog at constant currencies to €22.9 billion as customers continued migrating finance, procurement, supply chain and human resources systems onto cloud platforms that increasingly support AI applications.

Its acquisitions of data specialist Dremio and AI company Prior Labs further demonstrate the importance of preparing enterprise data for AI-driven workflows.

Capgemini increased its annual growth guidance after bookings rose 9.2%, while Sopra Steria upgraded its outlook following organic growth of 5.3%.

Both companies are benefiting from demand for AI implementation services, including workflow integration, data management and governance frameworks.

These capabilities are particularly valuable in industries such as defence, aerospace, healthcare and critical infrastructure, where AI solutions must operate within highly specialised software environments and strict regulatory controls.

European AI infrastructure gains strategic importance

A second development is strengthening the position of Europe’s established technology providers: customers increasingly want greater control over how AI is deployed.

Publicis Chief Executive Arthur Sadoun has said clients increasingly want advanced AI models operating within environments where they retain control over their technology and their data.

This preference is particularly evident in defence, aerospace and critical infrastructure, where sovereignty, cybersecurity and regulatory compliance are major priorities.

Airbus (EU:AIR) recently selected Scaleway, owned by French telecommunications group Iliad, alongside AI technology developed with Mistral for sensitive industrial and defence workloads. Around 70 critical Airbus applications are expected to operate on Scaleway by the end of 2028.

Meanwhile, OVHcloud reported 20.2% growth in public cloud revenue during its third quarter, suggesting rising demand for European-based AI infrastructure that is not subject to extraterritorial legislation such as the U.S. Cloud Act.

AI’s biggest winners may extend beyond model developers

Europe’s established technology companies must still demonstrate that AI-related demand can remain durable and that profitability can withstand increasing automation of lower-value consulting and software services.

Even so, recent earnings suggest the benefits of artificial intelligence are spreading well beyond companies building foundation models. Increasingly, the biggest opportunities may lie with businesses that enable AI to function effectively inside large, complex organisations.

UK equities moved higher on Tuesday after reports suggested the United States, Iran and Oman were close to reaching an interim agreement that would reopen the Strait of Hormuz, easing concerns over disruption to global energy supplies and reducing fears of a broader regional conflict.

By 03:14 ET (07:14 GMT), the FTSE 100 had climbed 0.41%. Germany’s DAX gained 0.49%, while France’s CAC 40 added 0.12%. Sterling also strengthened, rising 0.08% against the US dollar to 1.3460.

According to Axios, citing a US official and a regional source, Iran’s leadership has completed its internal approval process, bringing Washington, Tehran and Muscat closer to announcing a 60-day interim agreement.

US President Donald Trump told Fox News that the strait would reopen “very soon,” adding that Iran would be “hit really hard” if it failed to honour the arrangement.

The proposed framework, according to Axios citing two regional sources and a US official, would route inbound Gulf shipping through a northern corridor in Iranian waters and outbound traffic through a southern route in Omani waters. No transit fees would apply during the temporary agreement, while naval mines in the central shipping lane would be cleared within 30 days. Qatar, Pakistan and Saudi Arabia are also involved in the mediation efforts.

Separately, US Central Command (CENTCOM) said the southern shipping lane through the Strait of Hormuz “remains free and open” and confirmed that US forces have escorted more than 1,000 vessels through the route over the past three months despite “unwarranted Iranian aggression.”

In commodity markets, Brent crude rose 0.77% to $79.97 a barrel, while US West Texas Intermediate crude edged 0.07% higher to $75.83. Gold also advanced, with futures climbing 1.8% to $4,226.51 an ounce and spot gold gaining 2.2% to $4,166.96.

UK corporate highlights

• Hiscox (LSE:HSX) increased its retail growth guidance after reporting a 10.1% rise in first-half insurance premiums.
• Beazley (LSE:BEZ) reported that first-half profit more than halved as elevated claims and softer market conditions weighed on earnings.
• Glencore (LSE:GLEN) posted a strong increase in first-half earnings, supported by its trading division, and confirmed plans to pursue an Australian stock market listing.
• Next (LSE:NXT) upgraded its full-year profit forecast after stronger-than-expected sales growth during the latest quarter.

FTSE 100 opens steady as Legal & General raises shareholder returns, S4 Capital launches its first dividend and Brent crude eases.

Market Overview

The FTSE 100 opened marginally lower at 10,879.00, while the Euronext 100 edged higher by around 0.04 per cent and Germany’s DAX gained approximately 0.64 per cent at the open. Overnight, US markets finished strongly higher, with the Nasdaq closing at 26,584.99 and the S&P 500 at 7,736.52. Investor sentiment was supported by improving corporate earnings and optimism that progress towards a US-Iran agreement over the Strait of Hormuz could ease supply concerns and underpin broader risk appetite.

Commodity markets reflected easing geopolitical tensions as Brent crude slipped for a third consecutive session, while copper strengthened and gold edged higher. Natural gas also traded firmer. Against sterling, the US dollar and euro strengthened slightly, the Swiss franc was little changed, the Japanese yen weakened, the Australian dollar was broadly unchanged and Bitcoin fell slightly.

Market Numbers

FTSE 100: Down (-0.001%), 10,879.00

Euronext 100: Up (+0.04%), 1,958.79

DAX: Up (+0.64%), 26,371.96

NASDAQ: Up, 26,584.99

S&P 500: Up, 7,736.52

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In the Headlines

Strong results – Legal & General (LSE:LGEN)

Legal & General delivered a strong first-half performance, reporting higher profits, robust capital generation and growth across its retirement and asset management businesses. The insurer also increased shareholder returns through a higher interim dividend and an expanded share buyback programme, highlighting confidence in its capital position.

Margin improvement – S4 Capital (LSE:SFOR)

S4 Capital reported improved profitability, lower debt and announced its first-ever dividend as cost reductions continued to offset a subdued client spending environment. The update points to improving financial resilience despite ongoing macroeconomic uncertainty.

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Currencies (vs GBP)

USD: Up (+0.05%), $1.3451

CHF: Flat (+0.00%), Fr.1.0884

EUR: Up (+0.01%), €1.1664

JPY: Down (-0.11%), ¥212.121

AUD: Flat (+0.00%), $1.9088

Bitcoin (BTC/GBP): Down, £47,528.69

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Commodities

Copper: Up

Gold: Up

Brent Crude: Down

Natural Gas: Up

U.S. stock futures traded firmly higher on Tuesday, pointing to another positive start for Wall Street as investors responded to strong corporate earnings, lower oil prices and encouraging economic data.

Technology stocks looked set to lead the advance, with Nasdaq 100 futures gaining 1.1% ahead of the opening bell.

Palantir Powers Technology Sector Higher

Palantir (NASDAQ:PLTR) jumped more than 15% in pre-market trading after reporting better-than-expected second-quarter results and lifting its guidance for the full year.

“This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%,” said Palantir Co-Founder and CEO Alex Karp. “The sovereign AI revolution makes us very optimistic about the future.”

The strong earnings report helped lift sentiment across the broader technology sector before the market opened.

Oil Retreat Supports Risk Appetite

Investor confidence also received a boost from another sharp decline in crude oil prices.

U.S. crude futures dropped more than 3% after sliding over 5% on Monday as hopes for renewed diplomacy between Washington and Tehran reduced fears of supply disruptions.

Treasury Secretary Scott Bessent said negotiations with Iran were progressing and suggested an agreement on reopening the Strait of Hormuz could come soon.

“We are in talks with the Iranians,” Bessent told CNBC’s “Squawk Box.” “There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.”

Markets Extend Recent Gains

Wall Street finished Monday with another strong advance, extending its winning streak to a third consecutive session.

The Nasdaq rose 2.1% to 25,913.90, while the S&P 500 gained 1.5% to finish at 7,600.50. The Dow Jones Industrial Average added 1.3%, closing at 53,178.41.

Lower energy prices were the main driver after President Donald Trump announced that a planned military strike against Iran had been cancelled.

Trump Points to Potential Agreement

Trump said on Truth Social that discussions had reached a stage where military action was no longer necessary.

“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,” Trump said. “This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”

He added, “Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.”

Although Trump later suggested negotiations would begin immediately, Iranian officials rejected reports that direct talks had been arranged.

Airlines, Software and Retail Stocks Lead Rally

Airline shares benefited from lower fuel costs, sending the NYSE Arca Airline Index up 4.9%.

Software companies also enjoyed strong gains, with the Dow Jones U.S. Software Index climbing 4.1% to its highest close in two months.

Retail stocks extended their recent advance, while housing, gold and telecommunications sectors also moved higher. Pharmaceutical shares were among the weakest performers.

Manufacturing Activity Surprises to the Upside

Fresh data from the Institute for Supply Management added to the positive mood.

The U.S. Manufacturing PMI increased to 55.6 in July from 53.3 in June, comfortably ahead of economists’ forecasts of 54.0 and marking the highest reading since May 2022.

European equities traded mostly higher on Tuesday, supported by a series of encouraging corporate earnings reports and stronger-than-expected U.S. manufacturing data released overnight, helping investors look beyond ongoing geopolitical uncertainty.

Germany’s DAX gained 0.8%, while the UK’s FTSE 100 added 0.4%. France’s CAC 40 also moved higher, rising 0.3%.

UK Stocks Deliver Mixed Performance

Geotechnical engineering specialist Keller Group (LSE:KLR) slipped 1.3%, despite reporting a solid set of results for the six months ended 30 June 2026.

In contrast, building materials distributor Travis Perkins (LSE:TPK) surged almost 16% after publishing stronger-than-expected interim earnings.

Medical technology company Smith & Nephew (LSE:SN.) fell 6.7% after lowering its full-year revenue growth forecast, pointing to softer demand for hip and knee implants in the U.S. market.

Energy giant BP Plc (LSE:BP.) rose 1.4% after reporting that its second-quarter replacement cost (RC) profit more than doubled.

HSBC Holdings (LSE:HSBA) declined 1.3%, even after posting second-quarter earnings ahead of expectations, increasing its cost-saving targets and unveiling a fresh share buyback programme.

German Companies Show Diverging Results

Bayer (TG:BAYN) climbed 3.5% after the healthcare and agriculture group delivered an unexpected increase in second-quarter profit, supported by strong results from its crop science division.

Tyre manufacturer Continental (TG:CON) lost 1.8% after reporting a sharp decline in second-quarter net income following the spin-off of Aumovio.

Chemical producer Evonik Industries (TG:EVK) gained 1.7% after raising its adjusted EBITDA outlook for fiscal 2026.

Online fashion retailer Zalando (TG:ZAL) tumbled 16% after revising its 2026 revenue and growth expectations to the lower end of its previously issued guidance.

Lufthansa (TG:LHA) fell 10% after the airline warned that operating profit for the year is likely to be lower than previously expected, citing continued geopolitical uncertainty and a challenging macroeconomic environment.

U.S. stock futures moved higher on Tuesday as investors balanced ongoing uncertainty surrounding relations between the United States and Iran with another busy day of corporate earnings. Optimism over potential diplomatic progress in the Middle East continued to support markets, although conflicting statements from Washington and Tehran kept hopes of a swift agreement in check. Meanwhile, Palantir (NASDAQ:PLTR) and Snap (NYSE:SNAP) surged in after-hours trading after both companies delivered stronger-than-expected quarterly results.

Futures Signal Another Positive Session

Futures linked to the major U.S. equity indices pointed to additional gains as traders monitored geopolitical headlines alongside fresh earnings releases.

At 03:03 ET (07:03 GMT), Dow Jones futures were higher by 111 points, or 0.2%, S&P 500 futures gained 19 points, or 0.3%, and Nasdaq 100 futures advanced 201 points, or 0.7%.

The major U.S. indices closed higher on Monday after President Donald Trump chose not to authorise additional military strikes against Iran over the weekend. Reports that negotiations concerning the Strait of Hormuz could resume also encouraged investors, although Iranian officials later denied that any discussions were taking place.

Economic indicators added to the positive mood after U.S. manufacturing activity accelerated in July, supported by continued investment in artificial intelligence infrastructure. Strong earnings from Microsoft and Amazon further strengthened confidence in the AI sector, although investors remain cautious about how quickly heavy spending on data centres and advanced chips will translate into sustainable profitability.

Meanwhile, U.S. Treasury yields declined following signs of easing tensions in the Middle East and reports that the United States and Japan had coordinated currency market intervention to strengthen the yen. Bond yields generally move in the opposite direction to prices.

Mixed Signals Keep Iran Talks in Focus

Developments surrounding the conflict with Iran continue to dominate investor attention, but contradictory statements from both governments have made the diplomatic outlook increasingly difficult to assess.

President Trump said earlier this week that negotiations with Iran had resumed, describing them as the “last chance” for Tehran to “sign a good document.”

However, Iranian Foreign Ministry spokesperson Esmail Baghaei stated that no ceasefire discussions had been scheduled.

Investors have repeatedly faced alternating periods of escalating tensions and diplomatic optimism, while shipping through the Strait of Hormuz has remained heavily disrupted. The strategic route continues to face significant restrictions despite intermittent efforts to restart negotiations.

Oil prices have remained highly volatile throughout the conflict. On Tuesday, Brent crude futures rose 1.3% to $84.85 per barrel after climbing close to $100 per barrel last month. Before hostilities began, Brent was trading at around $70 per barrel.

Palantir Delivers Strong Growth and Raises Guidance

Palantir (NASDAQ:PLTR) climbed more than 15% after the closing bell after reporting robust second-quarter earnings and increasing its outlook for the full year.

Chief Executive Alex Karp said customers are relying on Palantir to provide them with “maximal control over their operations, data and decisions,” adding that “demand for AI sovereignty has been unleashed.”

Revenue almost doubled year over year to $1.94 billion, a performance Karp described as “otherworldly.” The company now forecasts annual revenue of up to $8.16 billion, compared with previous guidance of just under $7.7 billion.

Palantir’s Maven AI platform, which analyses military intelligence and supports battlefield targeting, has continued to strengthen its relationship with U.S. government agencies.

Even so, analysts have warned that lower-cost AI solutions from companies such as Anthropic could increase competitive pressure. Earlier this year, Palantir executives criticised what they referred to as “AI slop” produced by rival frontier AI developers.

Snap Posts Better Results

Snap (NYSE:SNAP) also gained more than 7% in after-hours trading after posting stronger quarterly figures.

The company reduced its second-quarter net loss to $164 million from $262.6 million a year earlier, helped by ongoing cost-saving measures. Snap has continued expanding the use of artificial intelligence across its business and previously announced plans to reduce its workforce by roughly 16%.

Revenue increased 19% to $1.6 billion, driven by stronger advertising demand across products including Sponsored Snaps. Advertising revenue rose 9% to $1.28 billion, while other revenue streams, including premium subscriptions, increased 85% to $316 million.

White House to Review AI Policy Framework

The Trump administration is expected to host executives from leading artificial intelligence companies at the White House on Tuesday, according to The Information.

People familiar with the plans said officials will examine a proposed framework for AI regulation during the meeting.

Representatives from OpenAI, Google and Anthropic are expected to attend, with the Office of the National Cyber Director organising the event.

It remains uncertain whether officials will seek industry feedback or present a completed regulatory framework.

European stock markets moved higher on Tuesday, edging closer to record territory as upbeat results from HSBC and Bayer helped offset weakness in consumer-related shares and continued geopolitical uncertainty.

The pan-European STOXX 600 gained 0.4% in early trading, leaving the index within reach of the record highs reached late last week.

Germany’s DAX and France’s CAC 40 both advanced 0.6%, while the FTSE 100 in London rose 0.5% and Italy’s FTSE MIB added 0.7%.

Corporate Results Keep Risk Appetite Firm

Investor confidence was supported by another round of better-than-expected quarterly results, extending the positive momentum seen during Monday’s session.

European equities have continued to show resilience despite broader economic uncertainty, helped by strong corporate balance sheets and lower energy costs.

Oil prices recovered slightly on Tuesday after falling sharply in the previous session following U.S. President Donald Trump’s announcement of diplomatic discussions with Iran.

However, concerns over supply routes remained after reports suggested shipping traffic through the Strait of Hormuz was still heavily restricted. The continued disruption kept traders alert to the risk of bottlenecks along one of the world’s most important energy transit corridors.

HSBC Slips Despite Profit Beat

HSBC (LSE:HSBA) shares fell 0.4% even though the bank reported second-quarter profit above market expectations.

The result was supported by resilient net interest income and continued strength in wealth management. HSBC also unveiled a new share repurchase programme worth up to $1 billion.

Bayer Rallies on Earnings Surprise

Bayer (TG:BAYN) climbed 4.3% after delivering an unexpected 1.9% increase in adjusted EBITDA for the second quarter.

Solid pharmaceutical demand helped offset weaker conditions in the agricultural business, allowing the German group to outperform market forecasts.

Consumer Shares Come Under Pressure

Beiersdorf (TG:BEI) declined 1.1% after the Nivea owner lowered its full-year 2026 sales outlook.

The company pointed to a difficult consumer environment and weaker demand across several important international markets.

Salvatore Ferragamo (BIT:SFER) dropped 8.5% following the publication of its first-half results.

Markets Await AMD and SpaceX Results

Attention is also turning to major earnings releases due after the close on Wall Street from semiconductor company AMD (NASDAQ:AMD) and Elon Musk’s SpaceX (NASDAQ:SPCX).

SpaceX’s first results as a listed company are expected to attract significant global attention following its $85.7 billion initial public offering in June.

The shares have fallen by more than 50% from their post-listing highs amid concerns over heavy spending on artificial intelligence infrastructure and volatile cash consumption.

Its latest financial update is therefore being closely watched as an indicator of global retail investor demand, mega-cap technology valuations and prospects for the wider IPO market.

FTSE 100 opens steady as HSBC launches a US$1 billion buyback and BP reports stronger profits while Brent crude eases on diplomacy hopes.

Market Overview

The FTSE 100 opened broadly unchanged at 10,857.63. Across Europe, the Euronext 100 slipped 0.01 per cent, while Germany’s DAX opened 0.90 per cent higher. Overnight in the United States, the Nasdaq closed higher at 25,913.90 and the S&P 500 gained to 7,600.50. Market sentiment was supported by renewed hopes of US-Iran diplomatic engagement, strong corporate earnings and improving risk appetite across European equities, while lower oil prices also helped underpin broader market sentiment.

Against sterling, the US dollar, Swiss franc and Australian dollar were little changed, while the euro edged marginally higher and the Japanese yen weakened slightly. Bitcoin was up slightly. In commodities, copper and gold moved higher, Brent crude eased as diplomatic developments weighed on energy prices, and natural gas traded firmer.

Market Numbers

FTSE 100: Down (-0.001%), 10,857.63

Euronext 100: Down (-0.01%), 1,939.07

DAX: Up (+0.90%), 26,234.84

NASDAQ: Up, 25,913.90

S&P 500: Up, 7,600.50

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In the Headlines

Strong results – HSBC Holdings (LSE:HSBA)

HSBC reported first-half profit ahead of market expectations and announced a further US$1 billion share buyback. The results reinforce the bank’s capital strength and commitment to returning excess capital to shareholders.

Earnings growth – BP plc (LSE:BP.)

BP more than doubled second-quarter profit as stronger oil prices boosted earnings. The improved performance highlights the continued benefit of higher energy prices for the group’s upstream business and cash generation.

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Currencies (vs GBP)

USD: Unchanged (0.00%), $1.3427

CHF: Up (+0.03%), Fr.1.0881

EUR: Up (+0.01%), €1.1668

JPY: Up (+0.05%), ¥211.5445

AUD: Unchanged (0.00%), $1.9189

Bitcoin (BTC/GBP): Up, £47,390.30

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Commodities

Copper: Up

Gold: Up

Brent Crude: Down

Natural Gas: Up