MARKET WRAPS
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No major economic indicators expected; trading updates from HSBC, AB InBev, UniCredit, Hugo Boss, Ferrari, Volvo, Fresenius Medical Care, Leonardo
Opening Call:
European stock futures were lower in tandem with declines in Asian equities. The dollar strengthened slightly. Oil fell and gold rose.
Equities:
European futures were lower early Tuesday with the war in the Middle East flaring back into view. The U.S.-Iran cease-fire has come under strain after Tehran fired at American warships and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz.
After Iran fired cruise missiles and other projectiles at U.S. warships and commercial vessels, U.S. Central Command said it used Apache helicopters to sink the Iranian speedboats that were harassing traffic in the strait.
"A renewed flare-up in the Persian Gulf shattered confidence in the four-week-old U.S.-Iran ceasefire," Commerzbank Research analysts said. The main theme has been risk-off sentiment, the analysts added.
The risk of a more prolonged or larger disruption to global energy markets remains important to monitor, especially with markets having rallied sharply in recent weeks, said James McCann, senior economist, investment strategy at Edward Jones.
Forex:
The U.S. dollar edged higher amid renewed Middle East tensions. The renewed military actions in the Middle East cast doubt on the fragile U.S.-Iran ceasefire, which could put upward pressure on the greenback, CBA's Carol Kong said.
Bonds:
While U.S. stocks hover around all-time highs, bonds have cheapened, creating opportunities in fixed income, DWS's George Catrambone said. He prefers the two- to 10-year Treasurys and high-quality corporate bonds, although spreads remain tight.
"After years of super low interest rates you're able to get somewhere between 5% and 7% plus to invest in credit," he said. "And that is adequate compensation despite where spreads are right now."
Energy:
Oil futures were lower on a possible technical correction after WTI and Brent futures settled markedly higher on Monday. However, declines are likely to be limited as the U.S.-Iran ceasefire comes under pressure, analysts said.
Crude prices have crept higher in recent weeks due to the stalemate between the U.S. and Iran, with some investors fretting that the apparent lack of progress in peace talks could lead to further supply disruptions.
Metals:
Gold could rise as long as consensus and Federal Reserve forward guidance point toward future easing, said State Street Investment Management strategists.
They reckon gold can perform even if the Fed is on hold as long as guidance suggests cuts are on the way.
However, a sustained hawkish turn in the monetary policy outlook could be a headwind, at least temporarily, for the yellow metal, they add.
Oil prices staying at $100 a barrel as the new normal could also cap the bullion's momentum towards $5,000 a troy ounce.
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Base metals declined. Market sentiment appears subdued amid fresh tensions stemming from the Middle East conflict. Sustained high energy prices were also raising concerns around demand prospects for industrial metals, ANZ Research said.
TODAY'S TOP HEADLINES
Attacks on U.S. Warships in Strait Test Trump's Desire to End Iran War
President Trump's desire to end the Iran war is being put to the test after Tehran fired at American warships on Monday and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz.
U.S. officials say Trump for days has toggled between two competing impulses: severely punishing Iran for failing to abandon its nuclear work, and avoiding a significant escalation that could draw the U.S. deeper into a Middle East conflict. Trump wants to avoid a fresh bombing campaign, officials say, preferring a negotiated end to Tehran's nuclear advancements and the weekslong war that has raised gas prices and hurt the global economy.
Morgan Stanley's Investment Banking Program in Budapest Hit by U.S. Probe
Two years ago, a new cohort of young Morgan Stanley investment bankers showed up to their first day of work at a beige office building off the east bank of the Danube River in Budapest.
The bank had recruited them from across Europe to work out of the Hungarian capital for a chance to be promoted to the big leagues in New York or London. Some of them worked well into the morning hours several days a week to support teams in the U.S., six time zones behind them.
ECB Could Hike Rates in June Should Inflation Outlook Not Improve, Nagel Says
The European Central Bank could hike interest rates at its meeting next month should eurozone inflation continue to pick up due to the impact of the Iran war, Germany's central bank governor said Monday.
The ECB announces its rate move on June 11, when staff will issue new macroeconomic projections for inflation and growth that are expected to take in the effect of continuing surging energy prices.
Berkshire Picks Gen Re Chairman as Insurance Star Ajit Jain's Successor
Berkshire Hathaway has selected Gen Re chairman Charlie Shamieh as the successor to longtime insurance mastermind Ajit Jain, aiming to ensure a smooth leadership transition at one of the conglomerate's most critical businesses, people familiar with the matter said.
Shamieh will step in to run Berkshire's sprawling insurance arm when Jain decides to retire, the people said. Jain, a 74-year-old executive who Berkshire chairman Warren Buffett has said is irreplaceable, hasn't signaled when he will step down. He is expected to remain in the role for the foreseeable future.
Ahead of Race to IPO, OpenAI Discussed Spinning Out Robotics, Hardware Divisions
OpenAI Chief Executive Sam Altman discussed spinning out the company's robotics and consumer-hardware divisions late last year, a move intended to give them more room to grow without weighing down the core business.
As part of the plan, the two companies would have been able to raise external funding and operate more independently. But it was rejected, in part because OpenAI concluded the new entities might have to remain consolidated on its balance sheet, according to people familiar with the matter.
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Expected Major Events for Tuesday
06:00/ROM: Mar PPI
06:30/SWI: Apr CPI
07:00/SPN: Apr Unemployment
07:30/EU: Apr EuroCOIN indicator of euro area economic activity
08:00/UK: Apr UK monthly car registrations figures
09:00/MLT: Mar Registered Unemployed
17:59/UK: Mar Adzuna UK Job Market Report
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May 05, 2026 00:00 ET (04:00 GMT)
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