Trading across the major regions reflected a tug of war between geopolitical risk and resilient corporate fundamentals. Below is a look at how the US, Asian and European sessions each played out.
Wall street slips as investors weigh Middle East risk
US equities closed mostly lower on Monday as markets absorbed the latest round of hostilities between Washington and Tehran, while taking some reassurance from reports that both sides remain open to diplomatic negotiations. The S&P 500 eased 0.2%, the Dow Jones Industrial Average gave up 0.6%, and the Nasdaq Composite was little changed, a sign that investors were not rushing for the exits despite the headlines. Oil prices moved modestly higher, with Brent crude settling above US$89 per barrel, while US Treasury yields also edged higher as investors assessed the potential inflationary impact of higher energy prices. Energy shares were among the standout performers as crude prices firmed amid heightened geopolitical uncertainty, while communication services also advanced after Alphabet gained ground on reports it is developing a new semiconductor aimed at improving the efficiency of its Gemini AI models. Semiconductor names staged a partial recovery following a rough patch, helping steady sentiment in the wider technology sector even as questions about the scale of AI spending persist. Markets are now turning their attention to a packed earnings calendar, with Alphabet and Tesla due to report results that could set the tone for technology and AI-linked shares in the days ahead. Overall, while geopolitical risks remain elevated and could contribute to near-term volatility, markets continue to be underpinned by resilient economic data and expectations for another quarter of solid corporate earnings growth.
Asian shares rebound on easing oil concerns
Asian markets advanced on Tuesday as softer oil prices and renewed optimism around Middle East diplomacy lifted risk appetite. Japan’s Nikkei climbed more than 2%, while South Korea’s KOSPI jumped close to 4%, with Samsung Electronics and SK Hynix leading the recovery as bargain hunters returned to previously battered technology and memory chip names ahead of key earnings from the AI supply chain. US equity futures were broadly flat overnight as traders looked ahead to results from Alphabet and Tesla, while keeping one eye on developments in the Middle East. Higher oil prices continued to stoke some inflation concerns, though there was little movement among major US names in after-hours dealing.
European shares hold steady ahead of earnings
European markets finished largely unchanged on Monday, with the STOXX Europe 600 dipping 0.3% as investors stayed cautious heading into a busy reporting week and amid rising geopolitical strain. Banking shares were mixed, with BNP Paribas and UniCredit making gains while LVMH slipped. Ryanair was among the region’s weakest performers, dropping 5.2% on worries over rising fuel costs.
Currency and commodity markets
Beyond equities, moves in currencies and commodities offer useful signals for how investors are pricing geopolitical and inflation risk.
US dollar firms on safe haven demand
The US dollar extended its gains on Tuesday, with the dollar index trading near 101 as escalating tensions in the Middle East boosted demand for safe-haven assets and reinforced expectations that the Federal Reserve could raise rates again. Markets are now assigning a higher probability to a September rate move. EUR/USD was changing hands at 1.1410.
Oil prices hold near recent highs
Oil prices were broadly stable in Asian trading after adding more than 1% on Monday, as investors weighed the risk of further escalation between the US and Iran against hopes that talks could resume. Concerns about possible disruption to Middle East energy supplies, following a maritime blockade of Saudi Arabia by the Houthis, continued to underpin prices ahead of US inventory data due later this week.
Stocks and sectors in focus
A wide range of company-specific developments, analyst calls and earnings updates shaped individual share price moves this week. The rundown below groups the main stories by theme.
Technology and AI-linked names
SpaceX is set to report its first quarterly results as a listed company on 4 August, an event that will also unlock roughly 911.5 million insider shares for trading two trading days later. Investors will be focused on Starlink’s profitability, launch cadence, AI-related capital spending and forward guidance, with the sharp rise in tradable shares seen as a potential source of pressure on the stock.
Nvidia has revealed a 9.3% stake in AI cloud infrastructure firm Nebius, building on its earlier US$2 billion investment. Part of the holding is tied to a warrant that cannot be exercised until September. Nebius, a key Nvidia customer and AI infrastructure provider, saw its shares climb around 3% in after-hours trading.
Alphabet shares gained after reports emerged that Google is working on an experimental AI chip built specifically for its Gemini models. The project is said to offer six to ten times the power efficiency of current processors and could help ease capacity constraints in AI computing. Google noted that it routinely evaluates new hardware concepts, though not every project reaches commercial release.
Samsung has set up a new robotics unit, called RX, that will report straight to the chief executive as the company looks to speed up development and bring products to market faster. The division will handle strategy, technology and execution, backed by new research hubs in the United States, China and Japan, with Samsung eyeing expansion into manufacturing, home and retail robotics.
Moonshot AI’s newly launched Chinese large language model, Kimi K3, has unsettled markets. While its heavy memory requirements are seen as a tailwind for memory chipmakers, Mizuho argues that fears over its impact on electronic design automation software are overstated, suggesting agentic AI is more likely to expand demand for tools from Synopsys and Cadence than to displace them, expanding the market.
Industrials, airlines and consumer names
GE Aerospace completed the world’s first high-altitude flight powered by hybrid-electric propulsion, testing technology that could eventually power single-aisle commercial aircraft. Carried out alongside NASA and BETA Technologies, the trial supports the push toward more fuel-efficient, lower-emission jet engines, although added system weight remains a hurdle to overcome.
ASML intends to offer eligible staff a €20,000 retention stock award to keep them at the company between 2027 and 2030, a move aimed at addressing a persistent talent shortage in the semiconductor industry. Europe’s most valuable listed company continues to post record profits alongside strong demand for its advanced chip-making machinery.
Ryanair shares dropped more than 5% after first-quarter profit fell 34% to €538 million, missing market expectations as fares declined 6% amid Middle East-related travel disruption. The airline still expects 4% passenger growth for the year but flagged that softer second-quarter fares, fuel price swings and rising costs could weigh on full-year earnings.
Adidas came out on top of Bloomberg’s unofficial World Cup sportswear rankings, outperforming both Nike and Puma. The company expects roughly €1.5 billion in tournament-related sales, driven by strong demand for jerseys and match balls, with Mexico’s shirt the top seller. Nike, by contrast, missed out on some of the exposure after several of its sponsored teams exited the tournament earlier than hoped.
London Stock Exchange Group plans to launch a standalone overnight trading venue in 2027, initially covering more than 2,600 exchange-traded products. The initiative is designed to meet growing demand for extended trading hours, particularly from Asian investors, as global exchanges look to compete with round-the-clock cryptocurrency platforms and shifting investor habits.
Analyst rating changes
Citi views the recent KOSPI sell-off as a buying opportunity and has kept its 10,000 target, implying upside of more than 50%. The bank expects foreign selling pressure to fade, supported by strong semiconductor demand, attractive valuations and supportive government policy, and still sees resilient memory chip demand despite recent jitters.
Morgan Stanley also sees the recent pullback in US memory stocks as a buying opportunity, pointing to intensifying AI-driven data centre memory shortages. The bank expects the shortage to persist into 2027 and 2028, with memory prices rising more than 25% this quarter, a backdrop it believes should support further gains for memory stocks.
Goldman Sachs attributes the sell-off in European software stocks to fears over AI-driven disruption. The bank expects AI to reshape rather than replace established players, with value shifting toward orchestration and agentic layers, while software pricing moves away from seat-based licensing toward consumption and outcome-based models as adoption grows.
UBS estimates Micron Technology could buy back more than 40% of its outstanding shares by 2028, supported by over $400 billion in projected free cash flow. The company remains restricted from buybacks until December 2026, after which UBS believes it could direct substantial excess cash toward shareholder returns.
Barclays upgraded Lumentum to Overweight, citing stronger demand for AI networking components and improving earnings prospects. The firm believes Lumentum is well placed to benefit from continued investment in AI infrastructure, while staying more cautious on parts of the semiconductor sector where valuations already reflect significant future growth.
Upcoming data and events
Today’s economic calendar features the UK unemployment rate and Germany’s ZEW economic sentiment index, alongside US Redbook retail sales data and API crude oil inventory figures. On the earnings side, the second-quarter reporting season continues with results due from Charles Schwab, Danaher, Chubb, Capital One Financial, Marsh & McLennan and Novartis.
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