As Oil Rises On Iran Standoff, Tech Rally Falters – Europe Market Wrap
As traders await US inflation statistics, shares are falling due to a selloff in high-flying technology stocks. Brent has risen for the third day in a row, with the Middle East ceasefire proving increasingly tenuous.
Nasdaq 100 futures fell 0.7% after a surge in chipmakers propelled the index to two consecutive record highs. S&P 500 contracts dropped 0.3%. South Korean electronics companies Samsung and SK Hynix are concerned about increased taxes on AI income. The tech sector also underperformed in Europe, with the Stoxx 600 falling 0.6%.
In the UK, investors sold gilts as PM Starmer defied mounting demands to resign. The yield on UK government debt rose by 8 bps or more across the curve, with the 30-year rate reaching a 1998 high of 5.79%. The Pound declined against its major counterparts.
Treasury yields climbed in early Tuesday trading, though less so than in Europe and Asia. The two-year rate was 1 bps higher, at 3.97%. The Dollar is poised for its greatest two-day gain this month.
A softer result would likely drive rates down, weaken the Dollar slightly, and allow equities and credit to continue their rises, according to Ielpo. A greater print would have the opposite effect: higher long-term rates, a firmer currency, and pressure on duration-sensitive sectors such as technology.
