Stocks Continue Rise on AI Optimism as Oil Slides – Europe Market Wrap
US equity futures extended their rally into a fifth straight session as enthusiasm around AI, falling oil prices and easing Treasury yields continued to support risk appetite.
Futures linked to the S&P 500 climbed 0.4%, while Nasdaq 100 contracts advanced 0.6% after chipmakers powered Wall Street benchmarks to fresh record highs. In Asia, South Korea’s SK Hynix joined US peer Micron Technology above the $1 trillion market capitalisation threshold, reinforcing momentum behind the global AI-driven rally. European equities also moved higher, with automakers and consumer shares leading a 0.5% advance.
Oil prices fell sharply as geopolitical concerns in the Middle East continued to ease. Brent crude dropped 3.2% to below $97 per barrel amid optimism that the US and Iran are nearing an agreement that could fully reopen the Strait of Hormuz and restore smoother energy flows. The Dollar traded little changed against major peers, while Treasuries extended their rebound, pushing the benchmark 10-year yield down 2 bps to 4.46%.
The moves added further strength to the AI trade, with investors increasingly betting that semiconductor companies will capture a significant share of future global capital expenditure. Lower oil prices also improved sentiment by reducing fears of a renewed inflation shock driven by energy markets.
Despite the increasingly bullish backdrop, the ECB warned that financial markets remain vulnerable to a sharp correction, cautioning that investors may be underestimating risks ranging from the Iran conflict to growing fiscal pressures.
