Global equity markets delivered a split verdict on Monday, with European and Asian shares advancing on progress in US-Iran peace negotiations while US indices faced pressure from rising bond yields and a sharp retreat in large-cap technology stocks. Oil prices declined sharply, the US dollar strengthened and small-cap shares reached new record highs, hinting at a potential rotation in market leadership that investors will want to monitor closely.
Global equity market overview
Asian and European markets advance
Asian and European equities moved broadly higher as investors welcomed encouraging signals from US-Iran peace talks. Lower energy prices, which followed reports of progress in those negotiations, were interpreted as a net positive for growth and a potential moderating force on inflation. Japanese and Chinese equities both climbed to fresh record highs, reflecting sustained investor confidence in the region, while European shares also made solid gains.
The pan-European STOXX Europe 600 index gained 0.7% and the Euro STOXX 50 rose 0.4%. Improving energy prices and receding geopolitical risk premiums lifted sentiment across the continent. Banks were among the strongest performers, with Santander, BBVA and Nordea each advancing around 2%. Semiconductor group Infineon surged 5% on optimism around artificial intelligence demand. Luxury goods names LVMH and Hermes were notable laggards.
The UK’s FTSE index rose 0.7%. Markets appeared largely unfazed by the political announcement that Prime Minister Keir Starmer intends to resign, having concluded he is no longer the right person to lead the Labour Party into the next general election. He will remain in post until a successor is appointed, with the leadership contest opening on 9 July and closing before Parliament returns in September. Investors focused instead on the broader economic picture and improving geopolitical sentiment.
US markets face headwinds from tech and yields
US equities had a more difficult session. The Nasdaq Composite fell 1.3%, reflecting continued volatility in AI-related and large-cap technology shares, while the S&P 500 declined 0.4%. Higher Treasury yields, in the wake of last week’s hawkish Federal Reserve meeting, added pressure on growth stock valuations.
Despite the weakness at the headline level, market breadth told a more nuanced story. The Dow Jones Industrial Average edged higher and finished close to record territory. The small-cap Russell 2000 index gained 0.8% to close at a new record high. This divergence in performance suggests investors may be broadening their exposure beyond the technology sector, rotating towards cyclical, value-oriented and domestically focused companies in what could represent a meaningful shift in market leadership.
On Tuesday, Asian markets gave back some of their recent gains as investors locked in profits after a strong AI-driven rally and continued to weigh the Federal Reserve’s hawkish stance. South Korea’s KOSPI led losses, with chipmakers SK Hynix and Samsung retreating sharply. Japanese, Chinese and Hong Kong markets also declined. Australia’s ASX 200 held broadly flat ahead of key economic data. US stock index futures tracked modestly lower overnight, with S&P 500 and Nasdaq 100 futures down around 0.2% and 0.3% respectively.
Currencies and commodities
This section covers developments in the US dollar, the euro and oil markets, all of which reflect the dominant themes of geopolitics and monetary policy.
Dollar strengthens as euro softens
The US dollar index held near 101, its highest level since May 2025, supported by expectations of further Federal Reserve rate increases and a broadly hawkish policy outlook. The EUR/USD exchange rate weakened to 1.1424 as markets priced in tighter US monetary conditions ahead of key PCE inflation data.
Oil retreats on supply outlook
Oil prices declined sharply on Monday, falling nearly 3%, before edging modestly higher on Tuesday. Brent crude rose to around $78 per barrel and WTI to approximately $74 as markets reassessed the supply outlook. Progress in US-Iran peace negotiations, combined with reports of temporary sanctions relief on Iranian oil exports and reduced disruption risks around the Strait of Hormuz, lowered the geopolitical risk premium that had been built into energy prices in recent weeks. Investors are continuing to monitor the situation closely as supply chain normalisation and inventory rebuilding unfold.
Key stock movers
Several individual stocks made notable moves, driven by earnings results, analyst rating changes, strategic announcements and other company-specific developments. Here is a sector-by-sector breakdown.
Technology and artificial intelligence
Alphabet shares fell more than 5% after two prominent AI researchers departed for rival organisations. John Jumper joined Anthropic while Noam Shazeer moved to OpenAI, raising investor concerns over the company’s ability to retain top talent in an intensely competitive AI landscape. Sentiment was further weighed by a sharp fall in SpaceX, in which Alphabet holds a stake, alongside broader anxieties around AI capital expenditure, shareholder dilution and regulatory scrutiny.
SpaceX itself fell more than 16% after KeyBanc initiated coverage with a Sector Weight rating, arguing that its current valuation already reflects strong long-term growth. Analysts pointed to uncertainty over Starship development timelines and xAI’s progress as reasons for caution. SpaceX also launched a debt offering and reported $100.8 billion in cash reserves.
Quantum computing stocks received a significant boost after President Trump signed executive orders aimed at strengthening US quantum technology capabilities and advancing post-quantum cybersecurity. Infleqtion, Rigetti, D-Wave and IonQ all gained ground on the news. IBM also advanced around 3.8% after Chief Executive Arvind Krishna received a public endorsement from Trump at a White House event. The measures reinforce federal backing for the sector and improve its long-term growth prospects.
Accenture was downgraded by TD Cowen from Buy to Hold, with its price target cut from $258 to $150. The broker cited weaker growth forecasts, macroeconomic uncertainty and concerns around AI-related disruption to Accenture’s core consulting model. TD Cowen suggested that a near-term recovery is unlikely and that catalysts for a valuation rerating are further away than previously expected.
Semiconductors and memory
Micron Technology rose after the company announced a strategic partnership with Anthropic. The deal encompasses co-design of AI-optimised memory systems, a multi-year supply agreement and a Micron investment in Anthropic’s funding round. It also includes internal adoption of Anthropic’s Claude models, reinforcing Micron’s positioning in AI infrastructure ahead of its upcoming earnings report.
Samsung Electronics reported strong growth in high-bandwidth memory exports in May, helping to drive record industry volumes according to analysis from Bernstein. The broker expects a sharp increase in Samsung’s second-quarter HBM revenue, supported by its HBM4 product ramp. SK Hynix saw softer export trends for the period, while HBM pricing overall remained stable.
Bernstein raised price targets for Samsung Electronics, SK Hynix and Micron Technology on expectations of sharply higher high-bandwidth memory prices. The broker forecasts earnings upgrades across the memory sector but cautions that AI infrastructure costs could rise by up to 30%. Negotiations for HBM pricing in 2027 are already under way, with tighter supply expected to benefit leading producers.
Intel gained momentum following reports of a potential collaboration with Apple on US chip design and manufacturing, which would support its foundry ambitions. Mizuho Financial Group raised its price target on Intel to $135 from $128, citing advanced packaging technologies as a key long-term growth driver and expressing increased confidence in the company’s turnaround plan.
Infineon Technologies received a significant upgrade from Bernstein, which raised its price target to EUR 102 from EUR 74 while maintaining an outperform rating. Bernstein cited strong long-term demand for power semiconductors from CPUs, AI workloads and data centres. Infineon’s position was also strengthened by further patent infringement victories against Chinese rival Innoscience in German courts.
Financials and banking
Bank of America Global Research now expects the US Federal Reserve to raise interest rates by a total of 75 basis points in 2026, citing resilient economic data, persistent inflation and a more hawkish policy stance under new Chair Kevin Warsh. The bank forecasts three separate rate increases, a more aggressive scenario than most market participants currently anticipate.
Bank of America also noted that gold equities remain attractively valued despite near-term headwinds from a hawkish Fed and a stronger dollar. Analysts pointed out that gold shares are pricing bullion at a significant discount to spot levels, with discounts of up to 19% in some cases. Strong central bank demand continues to support the long-term gold outlook, though BofA trimmed its target for Alamos Gold following production-related issues.
Energy and utilities
Chevron signed a 20-year agreement to supply natural gas power to a Microsoft data centre in Texas under the name Project Kilby. The 2.7 gigawatt facility will use gas turbines from GE Vernova and Caterpillar and is being developed in partnership with Joulent. The project highlights the growing trend of oil majors targeting energy demand from AI data centres. First power is expected in 2028 with full build-out continuing into the 2030s.
RWE is reportedly considering acquiring an additional stake of approximately 31% in German transmission operator Amprion, which would lift its ownership to 51% and trigger full consolidation of the business. The deal is said to value Amprion at a modest premium to its regulated asset base. Analysts suggest the transaction could significantly reshape RWE’s strategic profile, moving it towards a more utility-like structure.
Nordex secured three new US wind turbine orders totalling 484 megawatts, further strengthening its expansion in the North American market. The contracts span multiple turbine models across several projects. Goldman Sachs highlighted the strategic importance of continued US growth for Nordex and maintained a positive outlook on the broader onshore wind sector.
Consumer and industrials
CRH is in advanced discussions to acquire US construction engineering firm Arcosa in a transaction potentially valued at more than $8 billion enterprise value. Arcosa’s operations span construction materials and engineered structures, with significant exposure to aggregates. A successful deal would expand CRH’s US footprint and create meaningful operational overlap across key business segments.
EasyJet rejected a sweetened takeover approach from US investor Castlelake, which tabled a bid of GBP 6.25 per share. The airline’s board described the proposal as highly opportunistic and said it significantly undervalues the business. Directors also raised concerns over the leverage, conditions and ownership structure associated with the bid. Castlelake must decide by 26 June whether to make a formal offer or withdraw from the process.
Porsche maintained its 2026 operating margin guidance of between 5.5% and 7.5%, according to Chief Executive Michael Leiters, despite ongoing challenges in key markets. Leiters cautioned that margins are unlikely to return to their previous higher levels, citing structural weakness in China and noting that the US remains the company’s most important market. He also acknowledged that current cost reduction efforts are not yet sufficient.
Healthcare and defence
Pfizer shares fell around 1.5% in after-hours trading after a Phase 3 clinical trial of its lung cancer treatment sigvotatug vedotin failed to demonstrate an improvement in overall survival. The setback adds to concerns following a recent Chief Financial Officer departure and increases uncertainty around the company’s near-term growth trajectory. Investors are now looking ahead to August earnings results for further clarity on the pipeline.
AeroVironment restated its third-quarter and nine-month fiscal year 2026 accounts after identifying an $89.4 million goodwill impairment error linked to its Space unit. The correction reduced reported losses and improved earnings per share. The issue originated from incorrect goodwill allocation connected to the termination of a US government programme. Internal controls were found to be ineffective and two board members resigned.
Uber’s board, including Chief Executive Dara Khosrowshahi, has been sued by shareholders who allege that compliance failures exposed the company to thousands of sexual assault cases and related regulatory lawsuits. The lawsuit accuses directors of repeatedly ignoring warnings about safety and governance shortcomings and seeks compensation for breaches of fiduciary duty. Uber has rejected the allegations as misleading.
Analyst views
Here is a summary of notable analyst commentary published across major financial institutions.
Jefferies cut its Tesla price target to $375, warning that growing speculation around a potential Tesla-SpaceX merger could cause Tesla to trade increasingly as a proxy for SpaceX rather than on the basis of its own financial fundamentals. The broker also forecast below-consensus earnings for the company and argued that robotaxi and humanoid robot launches will generate losses in their early phases before delivering long-term returns.
Germany’s BDI industry association cut its 2026 economic growth forecast for the country to 0.4%, down from a prior estimate of 1%. The association cited persistent pressure from high energy costs, elevated taxes, rising labour expenses, excessive bureaucracy and geopolitical risks including the ongoing Iran conflict. BDI President Peter Leibinger called on the German government to implement wide-ranging reforms to boost competitiveness, attract investment, encourage innovation and support sustainable long-term economic growth.
On a historical note, Alan Greenspan, the influential economist who served five terms as chairman of the US Federal Reserve under four presidents, passed away at the age of 100. He was widely known for shaping US monetary policy during a long tenure marked by major economic shifts and financial market developments.
Upcoming economic events and earnings
The following data releases and corporate earnings reports are scheduled for the coming days and are worth monitoring for their potential market impact.
Tuesday’s agenda features flash PMI data across Germany, the United Kingdom and the United States, covering manufacturing, services and composite activity. These readings will help investors gauge the current momentum of global economic activity. US releases on the same day include the Richmond Fed manufacturing and services indices, money supply figures, a two-year Treasury note auction and weekly API crude oil inventory data. Earnings reports are due from FedEx Corporation, Carnival Corporation and KB Home.
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