Global markets swung sharply after the United States and Iran traded fresh military strikes, ending the ceasefire and sending oil prices climbing. Investors also digested new signals from the Federal Reserve on where interest rates might be headed next.
US equities
Wall Street closed mixed after President Trump said the ceasefire between the United States and Iran was over, followed by fresh American strikes and Iranian retaliation against military bases in Kuwait and Bahrain. Concerns over potential disruption to energy supplies pushed Brent crude close to 80 dollars a barrel, lifting Treasury yields as investors reassessed inflation risks. The Dow Jones Industrial Average fell 1.1 percent, the S&P 500 declined 0.3 percent, and the Nasdaq Composite bucked the trend to close 0.2 percent higher, supported by gains in technology and energy stocks. Equities finished well off their intraday lows after the president suggested this round of strikes should not be read as the opening of a drawn out conflict, while Vice President JD Vance said the US would respond firmly to any Iranian attempt to disrupt shipping through the Strait of Hormuz. Within equities, semiconductor stocks recovered after recent volatility, helping to stabilise the Nasdaq despite broader market weakness.
US equity index futures were little changed overnight as investors monitored escalating US-Iran tensions and rising oil prices. S&P 500 and Dow futures were flat, while Nasdaq 100 futures edged higher. In after-hours trading, chipmakers remained supported, with optimism over Broadcom’s Apple supply agreement helping underpin technology sentiment.
Asian and European markets
Asian markets were weaker on Thursday as geopolitical tensions and higher oil prices weighed on sentiment. South Korea led regional declines, with Samsung extending its losses even though SK Hynix staged a partial recovery. Japan was the exception, outperforming on renewed strength in semiconductor shares, while Australian, mainland Chinese and Hong Kong benchmarks all slipped.
In Europe, the picture was similarly downbeat. European shares fell sharply on Wednesday as renewed US-Iran tensions and higher oil prices fuelled inflation concerns and lifted bond yields. The STOXX Europe 600 fell 1.8 percent, with banks among the weakest performers. Santander and Deutsche Bank each dropped more than 5 percent, while SAP also declined. UniCredit eased back after raising its stake in Commerzbank.
Currencies, oil and the Fed’s next move
The US dollar and the euro
The dollar remained firm on Thursday, benefiting from safe-haven demand as renewed Middle East tensions reinforced expectations that interest rates could stay elevated for longer. The euro eased to around 1.1436 against the dollar as investors weighed the latest Federal Reserve minutes alongside the geopolitical backdrop.
Oil prices and the Strait of Hormuz
Oil was the standout mover. Brent crude pushed close to the 80 dollar a barrel mark on Wednesday after fresh US strikes on Iranian targets raised fears over supply disruption and safe passage through the Strait of Hormuz. Prices extended those gains into Thursday morning, with Brent trading near 79 dollars a barrel after surging more than 8 percent previously. Renewed attacks on commercial vessels and a tighter fuel market added to the geopolitical risk premium already built into crude prices. Even so, oil remains well below the highs recorded earlier in the year, suggesting markets are not yet pricing in a prolonged hit to global growth or corporate earnings.
Federal Reserve minutes and interest rate outlook
Minutes from the Federal Reserve’s June meeting showed policymakers remain split on the path ahead. Most officials still expect inflation to ease over time, but many warned that strong AI-driven investment, the renewed Middle East conflict and tariffs could keep price pressures elevated and potentially call for tighter policy. Officials also indicated support for shorter policy statements and less detailed forward guidance under Fed Chair Kevin Warsh.
China’s inflation data
Adding to the global picture, China’s consumer inflation slowed to 1.0 percent in June, coming in below expectations, while producer prices rose at their fastest annual pace in four years at 4.1 percent. The mixed reading points to persistent disinflationary pressure in the domestic economy even as factory-gate prices firm up, keeping pressure on Chinese policymakers to introduce further support measures for consumption.
Companies in focus
Technology and chips
Apple has committed to spending more than 30 billion dollars through 2031 under a chip supply agreement with Broadcom covering wireless connectivity components. Broadcom, in turn, plans to invest 1.5 billion dollars to expand its Colorado manufacturing facility, supporting increased US chip production and Apple’s broader domestic sourcing strategy.
SK Hynix’s planned 28 billion dollar ADR offering in the US reportedly drew demand more than seven times the number of shares on offer, a sign of strong investor appetite for AI-linked chipmakers. The offering was expected to price later today, with shares set to begin trading on the Nasdaq on Friday and proceeds earmarked for new manufacturing capacity.
Consumer and e-commerce
Alibaba told analysts ahead of its upcoming earnings release that losses in its instant-commerce division narrowed during the June quarter, with overall profitability holding steady. The update follows reports that management shared a more positive outlook for the business with analysts.
Aerospace, defence and industrials
Blue Origin is reportedly seeking outside investors for the first time, targeting a 10 billion dollar raise at a valuation of 130 billion dollars before the new funding. Jeff Bezos is said to be contributing 2 billion dollars personally, with Coatue Management potentially leading with a 4 billion dollar commitment. The funding would support the company’s long-term growth plans.
Separately, US President Donald Trump said the US will grant Ukraine a licence to manufacture Patriot missile interceptors, with American manufacturers providing technical guidance, following talks with Ukrainian President Volodymyr Zelenskyy. The move is aimed at boosting Ukraine’s air defence capabilities amid continued Russian missile attacks.
Rheinmetall looks set to secure a defence contract worth up to 462 million euros pending approval from German lawmakers, covering a naval laser weapon developed jointly with MBDA Deutschland, aimed at countering drone threats. The system is scheduled to enter service in 2029, subject to final parliamentary approval.
Banking
UniCredit confirmed it now holds a 47.6 percent stake in Commerzbank after completing its tender offer, up from an initial 26.7 percent, with shareholders tendering 17.6 percent of shares. The Italian lender said the move was aimed at raising its stake above 30 percent, and maintains it is not seeking outright control of the German bank.
Analyst calls
HSBC closed its overweight position on emerging market equities, citing heightened volatility in Asia and concerns around AI-related spending, while upgrading eurozone equities to overweight with a preference for banks. The bank maintained its overall bullish stance on global equities heading into the second half of 2026.
BMO Capital Markets started coverage of Royal Caribbean Cruises with an Outperform rating and a 370 dollar price target, naming it its top pick in the cruise sector. The broker cited strong customer growth, destination-led offerings, resilient cash generation and higher returns than peers, while viewing the current valuation as reasonable.
What to watch next
Looking ahead, markets will be tracking Germany’s May trade balance figures, along with a busy US calendar including weekly jobless claims, existing home sales, EIA natural gas inventories, Treasury auctions and mortgage rate data. Speeches from Federal Reserve officials Williams and Logan will also be in focus, alongside PepsiCo’s second quarter 2026 earnings release.
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