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European stock markets climbed on Tuesday, buoyed by news of a ceasefire agreement between Israel and Iran, which was verified by both Israeli Prime Minister Benjamin Netanyahu’s office and Iranian state media outlet Press TV.

Investors also reacted positively to stronger-than-expected business sentiment data out of Germany. According to a new survey from the Ifo Institute, German business confidence rose in June, signaling improved expectations among companies. The institute’s closely watched business climate index increased to 88.4, up from 87.5 in May, suggesting optimism is gaining ground in Europe’s largest economy.

Attention across the continent is now shifting to Federal Reserve Chair Jerome Powell, who is set to testify before U.S. lawmakers later today. Markets are keenly watching for clues on interest rate policy and the Fed’s outlook amid global economic uncertainty.

By midday trading, the DAX in Germany had jumped 1.9%, the CAC 40 in France gained 1.2%, and London’s FTSE 100 rose a more modest 0.4%.

Travel and leisure stocks were among the top performers, with Carnival and EasyJet rallying between 6% and 7% as investors turned back to risk-on sentiment.

In contrast, defense sector shares retreated on the news of easing geopolitical tensions. Hensoldt dropped 2.8%, and Rheinmetall declined 1.4%.

Among individual movers, Volvo AB climbed 2.6% after its construction equipment division announced plans to divest its stake in Chinese company Shandong Lingong Construction Machinery Co. (SDLG). The buyer is a fund largely controlled by Volvo’s local partner, the Lingong Group (LGG).

Meanwhile, RM Plc, a provider of educational tech and resources, surged 9% after reaffirming that it remains on course to meet full-year financial goals.

Packaging and distribution company Bunzl rose 1.5% after unveiling a new acquisition – a deal to purchase Solupack, a Brazilian firm specializing in food packaging solutions.

U.S. stock index futures tied to the Dow Jones, S&P 500, and Nasdaq are signaling a positive start on Tuesday, as investors respond favorably to developments in the Middle East and remain hopeful for continued gains after Monday’s rally.

Market sentiment received a notable boost after former President Donald Trump announced that a truce between Israel and Iran had been established.

“On the assumption that everything works as it should, which it will, I would like to congratulate both countries, Israel and Iran, on having the stamina, courage, and intelligence to end what should be called ‘THE 12-DAY WAR,’” Trump wrote on Truth Social.

Despite claims from Israeli officials accusing Iran of not fully honoring the ceasefire, traders appear encouraged by the potential for a cooling of tensions in the region.

The upbeat tone in the futures market also held steady after Federal Reserve Chair Jerome Powell reiterated the Fed’s patient stance on monetary policy, resisting calls—particularly from Trump—for an immediate rate cut.

“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell stated during his address to lawmakers on the House Financial Services Committee.

Stocks finished firmly in the green on Monday, as investors shrugged off initial uncertainty. The Dow Jones Industrial Average surged 374.96 points, or 0.9%, closing at 42,581.78. The Nasdaq Composite climbed 183.56 points, also up 0.9%, to end at 19,630.97, while the S&P 500 gained 57.33 points, rising 1.0% to 6,025.17.

Markets spent most of the earlier session fluctuating near the flatline as investors monitored potential fallout from recent U.S. strikes on Iranian nuclear sites. Tensions briefly reignited after reports surfaced that Iran might shut down the Strait of Hormuz and that a U.S. military installation in Qatar had come under attack.

However, equities rebounded strongly in the final hour of trading, following comments from Fed Vice Chair Michelle Bowman, who expressed openness to easing interest rates in July if labor market weakness persists and inflation expectations continue to soften.

Investors were further reassured by speculation that tariff reductions in ongoing U.S.-China trade talks may be on the table, helping to counterbalance earlier geopolitical concerns.

In housing market news, the National Association of Realtors reported that existing home sales increased by 0.8% in May, accompanied by a 6.2% rise in available inventory. However, on a year-over-year basis, sales were down 0.7%.

U.S. stock futures pointed toward gains Tuesday as optimism grew following President Donald Trump’s announcement of a ceasefire between Israel and Iran. Despite positive market momentum, uncertainty remains about how durable the truce will be. Oil prices declined sharply after the news, while gold slipped as investors moved away from traditional safe-haven assets. Meanwhile, attention is turning to Federal Reserve Chair Jerome Powell, who is set to testify before Congress this week amid growing criticism from Trump.

U.S. Futures Rise on Ceasefire News

Futures contracts on major U.S. indexes climbed in early trading, reflecting investor relief over the potential de-escalation in the Middle East conflict. By 3:40 a.m. ET, Dow futures had increased by 347 points (0.7%), S&P 500 futures rose 48 points (0.8%), and Nasdaq 100 futures advanced 234 points (1.0%).

The previous session on Wall Street closed higher, fueled by hopes that the U.S. military’s involvement in the recent Israel-Iran air exchanges would not escalate further. There had been significant concern that U.S. strikes on Iranian nuclear sites could spark a broader conflict threatening vital oil shipments from the region.

Iran retaliated to the U.S. attacks with missile strikes on a U.S. base in Qatar on Monday night, causing no casualties. Trump dismissed the retaliation as “weak.”

Trump Confirms Ceasefire, But Violence Continues

Trump declared that the ceasefire between Israel and Iran “is now in effect,” urging both sides to honor the truce. This statement raised hopes that the 12-day confrontation, which saw deadly air strikes on both sides, might be coming to an end.

However, Trump indicated the ceasefire might be phased in gradually, allowing some ongoing military actions to conclude. Reuters reported that an Iranian missile strike on Israel on Tuesday resulted in four deaths, while Iranian officials said an Israeli attack on northern Iran killed nine people.

Questions persist about the ceasefire’s durability. Israel, backed by the U.S. in its efforts to halt Iran’s nuclear and missile programs, agreed to pause hostilities, with Prime Minister Benjamin Netanyahu asserting that key objectives had been met.

Iranian Foreign Minister Abbas Araqchi echoed a similar stance, stating that Tehran would not continue retaliatory strikes but remains ready to respond if Israel initiates further aggression—a position Netanyahu also affirmed.

Oil Prices Drop on Reduced Tensions

Oil prices fell sharply following the ceasefire announcement as fears of disruption to Middle Eastern oil supplies eased. Traders had been watching for potential Iranian attempts to block crude shipments through the strategic Strait of Hormuz.

Although oil had spiked earlier amid these concerns, the perceived mildness of Iran’s missile response in Qatar signaled a de-escalation. By 3:16 a.m. ET, Brent crude futures had slipped 3.7% to $67.93 a barrel, and West Texas Intermediate futures fell 3.6% to $66.04 a barrel—the lowest levels since before Israel’s recent strikes on Iran. Oil prices had already dropped 9% on Monday.

Gold Declines as Investors Move Away from Safe Havens

Gold prices retreated by over 1% in European trading as geopolitical worries faded. Spot gold dropped 1.4% to $3,320.57 an ounce, touching the lowest price since June 11, while August gold futures fell 1.8% to $3,334.87 an ounce.

The ceasefire news weighed on the U.S. dollar, with the dollar index falling 0.4% to 98.06, while the euro and Japanese yen strengthened due to the oil price decline. Both the EU and Japan are net oil importers, unlike the U.S., which exports oil.

Benchmark 10-year U.S. Treasury yields remained steady, after slipping slightly on Monday amid signals from a Federal Reserve official supporting a potential rate cut next month. Treasury yields typically move inversely to bond prices.

All Eyes on Powell’s Congressional Appearance

Investor focus is now shifting to Washington, where Federal Reserve Chair Jerome Powell is scheduled to testify before Congress over two days starting Tuesday. Markets will be closely watching his remarks on the Fed’s recent decision to hold interest rates steady and its cautious stance on future rate changes, given uncertainties related to President Trump’s aggressive trade policies.

Trump continued his public criticism of Powell on Tuesday, calling him “a very dumb, hardheaded person” on social media and urging the Fed to cut rates by “two to three points,” blaming Powell’s “incompetence” for potential economic pain.

Analysts at ING warned that any perceived change in Powell’s stance could be interpreted as the Fed yielding to political pressure, potentially triggering a significant weakening of the U.S. dollar.

European energy and defense stocks pulled back on Tuesday after U.S. President Donald Trump announced a ceasefire between Israel and Iran, easing fears of an extended conflict in the Middle East.

Shares of oil majors TotalEnergies (EU:TTE), Shell (LSE:SHEL), and BP (LSE:BP.) all edged lower in early trade as crude prices slipped following the de-escalation. Defense firms also felt the impact, with Leonardo (BIT:LDO), Rheinmetall (TG:RHM), and BAE Systems (LSE:BA.) posting declines amid cooling expectations for sustained military activity.

Broader Indices Gain as Ceasefirea Lifts Market Mood

While oil and defense sectors weakened, broader European equities moved higher. The Stoxx 600 index rose 1.19%, Germany’s DAX climbed 1.8%, France’s CAC 40 added 1.2%, and the FTSE 100 in the U.K. gained 0.3%.

The overall market responded positively to Trump’s statement, in which he confirmed the ceasefire was “now in effect” and urged both sides to adhere to it. The agreement followed nearly two weeks of escalating hostilities, including deadly airstrikes and missile exchanges.

Oil and Safe Havens Decline on Reduced Tension

Global oil prices slumped in the aftermath of the announcement, reflecting waning fears of supply disruptions in the oil-rich region. The easing of tensions also weighed on traditional safe-haven assets, with both gold and the U.S. dollar declining as investor appetite for risk returned.

Trump indicated the ceasefire would be phased in, allowing ongoing operations to wind down. However, fresh violence occurred just before his announcement. Reuters reported that an Iranian missile strike killed four people in Israel on Tuesday, while Iranian authorities said an Israeli attack in northern Iran had left nine people dead.

Ceasefire Outlook Remains Fragile

Despite the diplomatic breakthrough, the truce’s long-term stability remains uncertain. Israeli Prime Minister Benjamin Netanyahu stated that Israel had achieved its key military objectives and was prepared to pause further operations.

Iranian Foreign Minister Abbas Araqchi echoed a similar stance, saying Iran does not intend to pursue more retaliatory strikes for now but remains ready to defend itself if provoked—an assertion Netanyahu matched.

With geopolitical risks momentarily eased, investor focus is likely to shift back to macroeconomic drivers, including upcoming central bank decisions and corporate earnings across Europe.

European equity markets posted solid gains on Tuesday, buoyed by easing geopolitical tensions in the Middle East and growing investor focus on U.S. monetary policy, as Federal Reserve Chair Jerome Powell prepares to address Congress.

As of 07:05 GMT, Germany’s DAX jumped 1.9%, France’s CAC 40 also added 1.9%, while the U.K.’s FTSE 100 rose a more modest 0.6%.

Middle East Truce Fuels Market Optimism

The rally was underpinned by renewed optimism over geopolitical stability after U.S. President Donald Trump confirmed that a ceasefire agreement between Israel and Iran had officially taken effect. The move potentially brings an end to nearly two weeks of hostilities that had stoked fears of broader regional escalation.

“The ceasefire is now in effect. Please do not violate it!” Trump posted early Tuesday on Truth Social, referring to what he had previously called the “12-Day War.”

According to earlier reports, Iran initiated a 12-hour ceasefire period, with Israel joining later—coinciding with heightened diplomatic pressure following recent U.S. airstrikes on Iranian nuclear targets. Tehran responded on Monday by launching missiles at a U.S. base in Qatar.

The de-escalation pushed oil prices sharply lower and encouraged traders to rotate into risk assets, lifting global equities.

Focus Shifts to Powell as Rate Debate Heats Up

Beyond geopolitics, market participants are bracing for Jerome Powell’s testimony before U.S. lawmakers, which begins Tuesday. Powell is expected to face tough questions over the Federal Reserve’s decision to maintain interest rates, despite mounting political pressure.

President Trump has been vocal in his disapproval, calling for significant rate cuts of “two to three percentage points” and accusing Powell of economic mismanagement. In a new post Tuesday, Trump wrote, “I hope Congress really works this very dumb, hard headed person over. We will be paying for his incompetence for many years to come.”

The Fed recently chose to hold rates steady amid concerns that Trump’s tariff policies could drive inflation higher, potentially limiting room for future rate cuts.

Meanwhile, central bank officials across Europe are scheduled to speak, including Andrew Bailey of the Bank of England and Christine Lagarde of the European Central Bank, adding more layers of monetary policy insight for investors to digest.

Later in the session, the June IFO business climate index for Germany—the eurozone’s largest economy—is expected to show a slight uptick in business confidence.

Corporate Highlights: AstraZeneca and Bunzl in Focus

In corporate news, AstraZeneca (LSE:AZN) received U.S. regulatory approval for Datroway, a targeted therapy for a form of lung cancer, marking another step forward in its oncology portfolio.

Sthree (LSE:STEM), a U.K.-based recruitment firm, reported a year-over-year decline in net fees for the first half of its fiscal 2025, citing a challenging hiring environment. However, the company noted sequential improvement in Q2.

Distribution and outsourcing firm Bunzl (LSE:BNZL) reported that trading remains in line with expectations for the first half of 2025. It also announced a strategic acquisition in Brazil and reaffirmed its full-year outlook.

Oil Prices Retreat as Supply Fears Ease

Crude oil prices continued their steep decline, retreating further from recent highs as the ceasefire in the Middle East eased concerns about potential supply disruptions from one of the world’s most critical oil-producing regions.

By 03:05 ET, benchmark Brent crude had dropped 3.9% to $67.79 per barrel, while WTI futures fell 3.9% to $65.84.

This follows Monday’s over 7% drop in both benchmarks, a sharp reversal from last week’s surge to five-month highs following the U.S. strikes on Iran. With Iran—OPEC’s third-largest crude producer—potentially able to ramp up exports again, markets are reassessing short-term supply dynamics.

Gold prices declined sharply during Asian trading hours on Tuesday, as a ceasefire agreement between Israel and Iran cooled geopolitical fears and prompted a shift toward riskier investments.

By 02:00 ET (06:00 GMT), spot gold had fallen 1.1% to $3,332.57 per ounce, touching its lowest level since June 11. Gold futures for August delivery also slid, down 1.4% to $3,346.02 per ounce.

Risk Appetite Strengthens Following Trump’s Ceasefire Declaration

The move out of safe-haven assets came after former U.S. President Donald Trump announced late Monday that a full ceasefire had been agreed upon between Israel and Iran, potentially concluding what he referred to as “THE 12 DAY WAR.” In a post on Truth Social, Trump confirmed, “THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT!”

Despite the declaration, some local reports noted explosions near Tel Aviv and Beersheba shortly beforehand. Iran has acknowledged the truce but emphasized that its continuation depends on Israel ceasing military operations.

The ceasefire follows a series of military escalations, including U.S. strikes on Iranian nuclear facilities and retaliatory missile attacks by Tehran targeting an American airbase in Qatar.

Markets responded optimistically. U.S. equity futures climbed, oil prices tumbled more than 3%, and geopolitical risk premiums faded—pressuring demand for traditional safe-haven assets like gold.

Metal Markets Mixed Amid Dollar Weakness

While gold and other precious metals dipped, some industrial metals gained ground, supported by a weaker U.S. dollar, with the Dollar Index down 0.3% during Asian hours.

• Silver futures eased 0.6% to $35.99 per ounce,
• Platinum edged up 0.9% to $1,280.15 per ounce.
• On the industrial side, London copper futures rose 0.3% to $9,693.35 per ton, while U.S. copper futures slipped 0.7% to $4.90 per pound.

Market participants are now turning their attention to Federal Reserve Chair Jerome Powell’s congressional testimony, which begins Tuesday. His remarks are expected to shed light on the Fed’s interest rate outlook amid ongoing political and economic pressures.

The U.S. dollar retreated on Tuesday as global markets responded positively to a ceasefire agreement between Israel and Iran, fueling a broad risk-on rally. The Dollar Index slipped 0.3% to 97.752 as of 08:00 GMT, though it remains up for the week.

Former U.S. President Donald Trump confirmed the ceasefire, calming geopolitical tensions that had recently supported the greenback and driven oil prices higher. The resulting drop in crude oil prices contributed to the dollar’s pullback, while lifting risk-sensitive currencies.

Analysts at ING noted that “moderate” dollar strength built on geopolitical fears had “faltered” following the oil price correction. Markets now shift focus to Fed Chair Jerome Powell’s testimony before Congress, where political pressure from Trump to cut rates by “two to three points” may raise concerns about central bank independence.

Sterling and Euro Advance

• GBP/USD surged 0.7% to 1.3596, with sterling buoyed by rising domestic grocery inflation. Data from Kantar showed food prices rose 4.7% in the four weeks to June 15—the highest since March 2024—driven by increases in essentials like butter, chocolate, and meat. This may complicate the Bank of England’s path to rate cuts.
• EUR/USD edged up 0.1% to 1.1591, helped by cheaper energy prices and improved German business sentiment. The Ifo business climate index rose to 88.4 in June, beating forecasts, with firms growing more optimistic about future conditions.

Yen Recovers, Yuan Holds Steady

• USD/JPY fell 0.8% to 144.97 as the yen rebounded from prior losses. Traders now await Tokyo inflation data for insights into the Bank of Japan’s monetary stance.
• USD/CNY dipped slightly to 7.1780 after China’s central bank left its key lending rate unchanged, signaling continued caution amid soft economic data.

The FTSE 100 opened higher on Tuesday, climbing 0.4% by 07:22 GMT, as global markets welcomed news of a ceasefire between Israel and Iran. The British pound also strengthened, rising 0.6% against the dollar to surpass $1.35. Germany’s DAX and France’s CAC 40 followed suit, gaining 1.8% and 1.4%, respectively.

Former U.S. President Donald Trump confirmed the ceasefire via a Truth Social post, signaling an end to recent hostilities, while Israel stated it had achieved its objectives. The truce fueled optimism among investors seeking geopolitical stability.

UK Corporate Updates

• Bunzl plc (LSE:BNZL) shares gained 2% after the distribution group confirmed its first-half 2025 performance was in line with expectations. The company reaffirmed full-year guidance, citing stable margins and revenue growth of around 4% at constant exchange rates. Bunzl also announced a strategic acquisition in Brazil, further expanding its footprint in Latin America.
• AstraZeneca (LSE:AZN) received U.S. approval for its Datroway lung cancer treatment for patients previously treated with chemotherapy. The regulatory win strengthens the company’s oncology portfolio.
• Telecom Plus (LSE:TEP) posted an 8.1% rise in adjusted pre-tax profit to £126.3 million, meeting forecasts despite a 9.9% decline in revenue. Adjusted EPS increased 9.4% to 119.2p, reflecting stronger profitability and operational efficiency.
• Sthree Plc (LSE:STEM) reported a 14% drop in group net fees in H1 FY25 but maintained its full-year profit guidance of £25 million. Improved demand in the U.S. engineering sector helped stabilize its Q2 performance.
• Policymaking & Government Spending: Prime Minister Keir Starmer pledged to raise UK defense and security expenditure to 5% of GDP by 2035. The government also announced a £1 billion investment in a national biosecurity center.
• Amazon (NASDAQ:AMZN) unveiled plans to invest £40 billion in the UK over the next three years, supporting AI innovation, logistics upgrades, and the creation of 4,000 new jobs. The investment could add an estimated £38 billion to UK GDP.
• Rio Tinto (LSE:RIO) and Hancock Prospecting committed $1.61 billion to develop the Hope Downs 2 iron ore project in Western Australia, furthering their resource ambitions in the Pilbara region.
• Regulatory Watch: The UK’s Competition and Markets Authority (CMA) proposed designating Google’s parent company, Alphabet Inc. (NASDAQ:GOOGL), with “strategic market status” under new digital regulations aimed at fostering competition in online search.

Bunzl plc (LSE:BNZL) confirmed on Tuesday that its performance for the first half of 2025 is tracking in line with internal projections, providing reassurance following a more cautious Q1 outlook. The international distribution and services group also revealed the acquisition of Solupack, a Brazilian packaging distributor, as part of its ongoing expansion strategy.

For the six-month period ending 30 June 2025, Bunzl expects group revenue to rise approximately 4% year-on-year at constant exchange rates and up to 1% at actual exchange rates. The growth is largely attributable to recent acquisitions, while core (underlying) revenue remains broadly unchanged. The operating margin for H1 is projected at around 7%, consistent with previous guidance.

The company reiterated its full-year guidance, expecting modest revenue growth at constant exchange rates in 2025, primarily fueled by acquisitions. Underlying revenue is anticipated to stay relatively flat. Bunzl forecasts the full-year operating margin to land just below 8%, down from 8.3% in 2024, with performance improvements anticipated in the second half.

In an update on its acquisition strategy, Bunzl announced the signing of an agreement in May to acquire Solupack, a Brazilian provider of own-brand food packaging products. Solupack posted revenue of BRL 106 million (around £15 million) in 2024. The deal, pending regulatory clearance, is expected to enhance Bunzl’s footprint in Brazil and complement its existing local operations. This marks the third acquisition for Bunzl so far in 2025.

Financially, Bunzl expects leverage to stand at roughly 2.0x adjusted net debt to EBITDA by mid-year, aligning with the lower end of its target range of 2.0 to 2.5x as it manages acquisition-related capital deployment.

Chief Executive Frank van Zanten noted that despite ongoing macroeconomic uncertainty, Bunzl is performing as anticipated, with a focus on operational enhancements in North America and Europe. He emphasized the company’s commitment to disciplined growth and highlighted that the acquisition pipeline remains active.

Analysts at RBC welcomed the stable trading update, commenting that although execution will be key in H2, the report offers a measure of relief after previous profit warnings.

Mobico Group (LSE:MCG) has made notable strides in divesting its North America School Bus business to I Squared Capital for up to $608 million. The transaction is awaiting final approval from the US Surface Transportation Board, expected by early July 2025, with the deal anticipated to close later that month.

The sale is set to provide Mobico with substantial funds to address upcoming debt maturities and bolster its liquidity position. Meanwhile, the company forecasts its Adjusted Operating Profit for FY 2025—excluding contributions from the School Bus division—between £180 million and £195 million.

Despite ongoing financial challenges marked by sustained losses and elevated leverage, Mobico’s strategic divestment and recent contract wins offer pathways toward recovery. However, bearish technical trends and valuation pressures continue to weigh on investor sentiment.

About Mobico Group

Mobico Group is a major global shared mobility operator delivering bus, coach, and rail services across regions including the UK, North America, continental Europe, North Africa, and the Middle East. The company focuses on providing efficient and sustainable transportation solutions worldwide.