Global equity markets started the week on a cautious note, reflecting a balance between optimism in technology-driven growth and concerns around macroeconomic pressures and geopolitical risks. Investors are closely monitoring upcoming central bank decisions and earnings releases, which are expected to shape near-term market direction.
Market overview
Equities showed limited movement on Monday, following the strong rally seen last week.
The S&P 500 recorded a slight gain, while the Nasdaq Composite outperformed with a modest increase of around 0.2%, supported in part by strength in technology shares, including a notable move in Nvidia. In contrast, the Dow Jones Industrial Average edged lower. Sector performance was mixed, with communication services and financial stocks leading, while consumer staples and real estate lagged behind.
Rising bond yields and increasing oil prices contributed to a more cautious market tone, as investors weighed macroeconomic and geopolitical developments. Overall, the session reflected a tug of war between long-term growth optimism, particularly in technology, and shorter-term pressures from policy and global developments.
Global market performance
A closer look at regional markets highlights diverging trends across Asia, the US and Europe.
Asian markets
Asian equities delivered mixed results on Tuesday. South Korea’s KOSPI surged over 1% to reach a new high, while Japan’s Nikkei 225 declined by 0.7% after recently hitting record levels. Meanwhile, China’s Shanghai Composite and Hong Kong’s Hang Seng Index edged lower, pressured by elevated oil prices and geopolitical uncertainty.
US markets and futures
US equity futures moved slightly higher overnight, with both S&P 500 and Nasdaq 100 futures gaining around 0.2%. Dow futures also posted modest gains.
In after-hours trading, Bed Bath & Beyond and LendingClub surged on strong results. However, overall sentiment remains cautious amid ongoing geopolitical tensions and a busy earnings calendar.
European markets
European equities extended their losses for a sixth consecutive session. The STOXX Europe 600 declined by 0.3%, while the Euro Stoxx 50 dropped 0.4%.
Elevated energy prices, persistent inflation concerns and expectations of a more hawkish European Central Bank weighed heavily on investor sentiment. Technology stocks underperformed, with notable declines in ASML and Prosus, while Siemens Energy saw a sharp drop.
Currency and commodities update
Currency and commodity markets continue to reflect global uncertainty and geopolitical developments.
US dollar
The US dollar remained broadly stable, with EUR/USD trading near 1.1714. The US Dollar Index hovered around 98.5 following a sharp prior decline, partly as easing US–Iran tensions reduced demand for safe-haven assets. Markets are also looking ahead to the Federal Reserve meeting, where rates are expected to remain unchanged.
Oil prices
Oil prices moved higher in Asian trading, with Brent crude rising 1% to $109.34 per barrel and West Texas Intermediate gaining 0.9% to $97.28.
The increase was driven by persistent US–Iran tensions, after Donald Trump rejected Tehran’s proposal regarding the Strait of Hormuz, alongside ongoing supply disruptions and a US naval blockade that continues to tighten global oil markets.
Geopolitical developments impacting markets
Geopolitical tensions remain a key driver of market sentiment, particularly in the energy sector.
The Trump administration and its team remain sceptical of Iran’s proposal to reopen the Strait of Hormuz while delaying nuclear talks, questioning Tehran’s intentions. The US is expected to respond with a counteroffer while continuing negotiations.
Meanwhile, a US naval blockade is actively disrupting Iran’s oil exports, with officials warning that production could soon decline sharply, raising concerns about further supply constraints and inflationary pressures.
Stocks in focus
Several major companies made headlines due to strategic developments, earnings updates and analyst actions.
Technology and AI developments
Microsoft and OpenAI have restructured their partnership, removing exclusivity on intellectual property while maintaining Microsoft’s access to OpenAI models through 2032 on a non-exclusive basis, allowing OpenAI to collaborate with additional cloud providers.
Qualcomm gained momentum following reports of collaboration with OpenAI and MediaTek on future smartphone processors, with Luxshare expected to support co-design and manufacturing for 2028 production, reinforcing expectations of an AI-driven upgrade cycle.
Meta Platforms has agreed with Overview Energy to secure space-based solar power for its data centres, with supply expected by 2030 and potential access to up to one gigawatt of capacity, highlighting rising energy demand from AI infrastructure.
Consumer and digital platforms
Spotify is expanding into the wellness sector through a partnership with Peloton, offering users access to over 1,400 fitness classes including strength training, yoga and meditation.
Domino’s Pizza issued a weaker growth outlook, citing pressured consumer sentiment, inflation, rising costs and increased competition, with both US and international same-store sales underperforming expectations.
OpenAI developments
OpenAI reportedly missed internal targets for user growth and revenue, including its goal of reaching one billion weekly ChatGPT users by the end of 2025. Concerns are also emerging over its ability to fund large-scale data centre commitments estimated at around $600 billion, amid rising competition and scrutiny ahead of a planned IPO.
Financials and analyst ratings
JPMorgan remains optimistic on equities, encouraging investors to view geopolitical-driven sell-offs as buying opportunities, noting differences from 2022 such as lower wage growth and more neutral policy rates.
Citigroup has raised its oil price forecasts and recommends near-term crude exposure, citing ongoing disruption in the Strait of Hormuz and the likelihood of prolonged supply tightness.
Northland Capital Markets downgraded AMD to Market Perform, warning that long-term expectations may be overly optimistic amid rising competition and potential slowdown in AI infrastructure spending.
Mizuho upgraded CrowdStrike to Outperform while downgrading Adobe to Neutral, citing stronger growth drivers in AI security and more limited upside for Adobe.
BofA Global Research upgraded Commerzbank ahead of a potential UniCredit takeover, pointing to improved profitability and valuation metrics.
Redburn adjusted ratings across social media firms, upgrading Snap to Buy, downgrading Pinterest to Neutral and maintaining a Sell rating on Reddit, reflecting shifting dynamics in AI-driven advertising.
Upcoming economic data and events
Markets are now focused on a series of key economic releases and corporate earnings.
In the US, upcoming data includes the Case-Shiller and House Price Index updates, consumer confidence figures, Richmond and Dallas Fed manufacturing and services surveys, money supply data, a 7-year Treasury auction, and API crude inventory data.
On the corporate front, major companies such as Visa, Coca-Cola, Novartis, T-Mobile US and CNOOC are set to report earnings.
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