Bonds and Stocks Rise as Brent Drops Below $90 – Europe Market Wrap
Stocks and bonds rallied on Monday as a sharp decline in oil prices eased inflation concerns, giving investors a positive start to a week packed with major earnings releases and central bank decisions. Nasdaq 100 futures climbed 1.6%, while S&P 500 futures gained 1%, with AI-related stocks, including chipmakers and electrical equipment manufacturers, leading the advance.
Bond markets also strengthened, with the US 10-year Treasury yield falling 4 bps to 4.64%. The move followed a third consecutive night without US strikes on Iran, helping Brent crude tumble 8.2% to around $89 a barrel. The Dollar slipped 0.2%, while gold traded near $4,100 an ounce.
The retreat in oil prices offered investors relief after Brent had surged by more than a third this month, fueling fears that central banks would need to keep monetary policy tighter for longer. Markets also remain focused on whether Big Tech companies can justify their massive AI spending after weeks of heightened volatility across the technology sector.
In Europe, the Stoxx 600 rose 0.9%, with luxury stocks advancing ahead of LVMH’s earnings. The Swiss franc outperformed major currencies against the Dollar as investors continued to monitor global risk sentiment.
Despite early gains across all members of the Magnificent Seven, investors remain cautious ahead of earnings from the largest US technology companies. Markets will be looking for reassurance that soaring AI investment can continue to support future profit growth as capital expenditure reaches record levels.
