MARKET WRAPS
Stocks:
European shares largely rose Tuesday, though technology stocks fell as a fresh AI selloff intensified.
European semiconductor companies were in decline after investors dumped Asian stocks linked to artificial intelligence. ASML Holding and rival ASM International were down 1.8% and 2.3%, respectively.
Chinese chip maker CXMT said it achieved a major breakthrough in memory technology that would allow it to produce more efficient chips. The release added to market jitters prompted by comments from Broadcom Chief Executive Hock Tan, who compared AI investors to casino gamblers.
"Investors are still willing to fund AI infrastructure, but the hurdle rate is rising as rates remain high and earnings visibility becomes more important," Tickmill Group said.
Meanwhile, oil prices fell in early European trading after settling higher in the previous session, as traders weigh supply risks from escalating attacks on Saudi Arabia against the prospect of renewed Russian diesel supplies.
U.S. Markets:
Stock futures were mixed on Tuesday as a number of major banks will kick off the third-quarter earnings season.
Investors are also awaiting inflation data due Wednesday which will be a key test of how much the surge in energy prices is feeding through into the cost of living and how much pressure the Federal Reserve might feel to raise interest rates further, Wealth Club said.
Forex:
The euro rose. The euro is about 1.5% undervalued versus the dollar relative to short-term fundamentals following recent losses due to French debt concerns, ING said.
The dollar remained elevated after reaching an 18-month high on Monday, lifted by softer risk sentiment and comments from Federal Reserve official Beth Hammack arguing for further interest-rate rises, Danske Bank said.
Sterling could remain firm against the euro for some time after reaching a 16-month high overnight, ING said.
Bonds:
Eurozone government bond yields opened lower, tracking Treasury yields and helped by declining oil prices.
Treasury yields eased in line with the fall in oil after the holiday break in trading Monday.
The potential for the 10-year Treasury yield to rise further appears limited, according to DZ Bank.
Energy:
Brent crude was down 1.1%, while WTI futures slid 1.2%.
Brent crude could fall to $65 a barrel from the second quarter of 2027 if shipping through the Strait of Hormuz normalizes and regional energy infrastructure avoids lasting damage, Citi Research said.
Gas
European natural-gas prices climbed to their highest level since December 2022, with the benchmark Dutch TTF contract up 1.7%.
"The market is grappling with the idea that we're about to go through a large part of the Northern hemisphere winter with little Persian Gulf LNG supply," ING said.
Metals:
Gold edged higher as a pullback in oil prices and a weaker U.S. dollar lent support, with investors awaiting U.S. inflation figures for clues on the Fed's interest-rate outlook.
Gold chart
Comex gold futures may retest support at $4,150 per ounce, RHB Retail Research said. The futures' latest negative price action on the daily chart reaffirms that immediate resistance is still firm at the $4,300-per-ounce level.
EMEA HEADLINES
BP's New CEO to Outline Strategy as Balance Sheet Strengthens
BP said it would update its strategy in December, giving new Chief Executive Meg O'Neill her first opportunity to outline her vision for the British energy major to investors.
O'Neill has headed up the company since April this year and inherited a strategy that re-prioritized its traditional oil-and-gas business while paring back spending on renewable energy. Pressure on the company increased when in February last year activist hedge fund Elliott Management took a stake in it.
Monte dei Paschi Pushes Back Against Intesa's Sweetened Bid
Banca Monte dei Paschi di Siena questioned Intesa Sanpaolo's sweetened takeover bid after the suitor warned it could pull out if its target's shareholders back alternative deals later this month.
Following an extraordinary board meeting Monday, Monte dei Paschi said the premium from Intesa's bid remains below the average seen in comparable offers in the Italian banking sector.
Stellantis Shipments Fall on North America Summer Shutdowns
Jeep maker Stellantis reported an estimated 1% decrease in third-quarter vehicle shipments, as planned summer production shutdowns in North America and a drop in the Turkish market offset growth in European electric-vehicle shipments.
The company said Tuesday that global shipments-vehicle deliveries to dealers, distributors, or directly from the company to retail and fleet customers-fell to an estimated 1.29 million.
CSG Buys Largest Stake in Canada's MDA Space to Enter Space Sector
Czech arms maker CSG said it has become the largest shareholder in Canadian space technology company MDA Space as it seeks to venture into the space sector.
CSG said Tuesday it bought a 9.5% stake in MDA Space, which is listed on the Toronto Stock Exchange and the New York Stock Exchange.
Publicis Account Wins Fuel Top-Line Growth
Publicis Groupe said top-line growth picked up in the third quarter, with continued market-share gains after the merger of two of its rivals boosting its prospects for next year.
The Paris-based advertising group said Tuesday that organic net revenue grew 5% in the third quarter, an acceleration from the growth rate of 4.8% it reported for the prior quarter. Overall, Publicis reported third-quarter revenue of 4.61 billion euros ($5.14 billion), up 12% on a reported basis.
GLOBAL NEWS
IMF Warns of Global Economic Setbacks as Shocks Test Resilience
The global economy has been remarkably resilient in the face of the worst energy shock in decades, but if borrowing costs and inflation go unchecked, a sharp slowdown looms, the International Monetary Fund said.
In its latest World Economic Outlook, the IMF forecast global growth of 3.1% this year. That was unchanged on its April forecasts, although a slightly more bullish view than an update provided in July as it digested new macroeconomic developments globally.
Why Trump's Diesel-Supply Deal With Russia Won't Ease Fuel Prices Much
President Trump says he struck a diesel-supply deal with Russia. It likely won't do much to ease fuel prices ahead of next month's midterm elections.
The deal is getting strong pushback in Washington from lawmakers on both sides of the aisle who question its legality. Even if it withstands legal challenges, energy analysts and traders say the supply quantities involved are too small to lower prices much.
China's Weakening Economy Is Creating a Lost Generation
DALI, China-For months, Ma Yongjian didn't tell his parents where he was.
Halfway through a master's degree in computer science, the 27-year-old stopped going to class last year. Software engineering used to be a safe career choice, but the rise of artificial intelligence and a wave of layoffs at Chinese tech companies left Ma convinced he wouldn't be able to land a good job. He no longer saw the point of studying.
Iran Is Fortifying Nuclear Sites and Rallying Its People for a Return to Fighting
Iran is fortifying its defenses, rallying loyalists and threatening a wider, harsher response against the U.S. and its Gulf allies as it prepares for potential American attacks after the midterms and seeks to deter them.
Iranian officials have warned publicly and in private conversations with regional officials that the Islamic Republic will respond with further escalation across the Middle East if the U.S. launches new strikes.
A $300 Million Windfall for Trust Collecting Funds for Trump Projects
Ten megadonors accounted for more than half of the $300 million that President Trump raised for the new White House ballroom and legacy projects around Washington, according to a new filing from the nonprofit he and his allies are using to take in the money.
The identities of the donors, who contributed between $10 million and $25 million apiece, weren't included in the public filing by the Trust for the National Mall, a long established nonprofit which the White House has also used to manage funds it raised for the triumphal arch and the Rose Garden.
Write to priscila.barrera@wsj.com
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