Markets Stabilize as Iran-Israel Tensions Ease
WAR PREMIUM DEFLATES
Selling pressure that had gripped markets amid the Israel-Iran military exchange subsided as both parties signaled a pause in hostilities, stoking cautious optimism that the conflict would not spiral into an all-out regional war.
U.S. President Donald Trump struck an upbeat tone, stating that nuclear negotiations with Tehran were advancing favorably and that he anticipates declaring victory within the next two weeks, claiming the American side had prevailed in the standoff. Trump also disclosed that he had directly cautioned Israeli Prime Minister Benjamin Netanyahu — during a phone call — that a further escalation risked leaving Israel diplomatically isolated against Iran.
Brent crude, which had surged on war-risk pricing, retreated to $92.4 per barrel on Tuesday, a 1.1% decline from Monday's $93.4. The U.S. 10-Year Treasury yield slipped to 4.56% Tuesday after touching 4.59% the prior session, while the U.S. Dollar Index edged down 0.1% to 99.9 — retreating after briefly surpassing the 100 threshold on June 5 for the first time since April 7.
IPO FRENZY: OPENAI TARGETS $1 TRILLION VALUATION
Investor attention is now pivoting sharply toward a landmark wave of U.S. capital markets activity. OpenAI, the company behind ChatGPT, has formally filed IPO documents — a move that, if approved, is expected to push its valuation past $1 trillion. The filing follows SpaceX's earlier announcement of its own IPO plans.
Analysts noted that public listings of large-scale technology firms carrying massive growth potential could significantly deepen capital market breadth and liquidity.
AI STOCKS SURGE; CHIPMAKERS REBOUND
Chipmaker equities staged a notable comeback. Micron Technology surged nearly 10%, Broadcom climbed 3%, and Nvidia advanced 2%, as continued enthusiasm around artificial intelligence sustained institutional interest in the sector.
U.S. benchmark indices reflected the improving mood — the S&P 500 gained 0.3% and the Nasdaq added 0.86% on Monday, though the Dow Jones slipped 0.16%. All three American indexes opened Tuesday in positive territory.
Adding to the constructive backdrop, short-term inflation expectations among U.S. consumers eased to 3.5% in May, according to a New York Fed survey released Monday.
EUROPE: MIXED SIGNALS, ECB IN FOCUS
European equity markets traded in mixed fashion as geopolitical uncertainty continued to temper investor appetite in the region. A modest pullback in oil prices and the tech sector's strength offered partial support to risk sentiment across the bloc.
All eyes are now on the European Central Bank (ECB), which is widely expected to raise interest rates on Thursday. Forecasts for a subsequent rate cut have been pushed back from March 2027 to mid-2027, and the bank is also anticipated to revise its growth projections downward.
Germany's factory orders dropped at nearly twice the pace economists had forecast in April, weighed down by global uncertainty and deteriorating demand linked to the Middle East conflict. Economists warned that the German economy risks contracting in the second quarter, particularly amid deepening stress in the automotive sector.
Eurozone investor confidence, however, continued to improve for a second straight month in June.
Among major European indices on Monday, the FTSE 100 edged up 0.05% and Italy's FTSE MIB 30 gained 0.63%, while Germany's DAX 40 shed 0.58% and France's CAC 40 lost 0.23%. European markets opened Tuesday on mixed footing.
ASIA: BROAD GAINS, HONG KONG LAGS
Asian equity markets largely followed the positive lead set by Wall Street and Europe, with Hong Kong the notable exception.
South Korean investors poured into technology and AI-linked equities, propelling the Kospi Index to a striking 7.5% jump. Japan's Nikkei 225 rose 2.2% and China's Shanghai Composite added 0.6%, while Hong Kong's Hang Seng Index slipped 0.3%.
On the trade front, China posted a May trade surplus of $105.4 billion, with exports surging 19.4% and imports climbing 27.4% year-on-year — data analysts partly attributed to Beijing's success in redirecting trade flows toward alternative markets as the U.S.-Israel-Iran conflict disrupted global commerce. Domestic demand, however, remained a persistent weak spot.
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