LONDON/SYDNEY – Global stocks were firmer as U.S. markets reopened after the holidays, but oil prices fell ahead of U.S.-Iranian nuclear talks scheduled to begin later on Tuesday.
U.S. tech-heavy Nasdaq futures fell 0.5%, suggesting the exit from the artificial intelligence giants may not be over yet.
“The market is looking at each sector one by one and stress-testing business models to see how resilient they are to AI disruption,” said Axel Bott, head of market strategy at Ostrum Asset Management.
Investors around the world are increasingly concerned that companies are overinvesting, according to Bank of America’s monthly survey.
In Europe, the pan-European STOXX 600 index rose 0.2%, marking its second straight day of gains, while the MSCI national index was flat.
“For years, fund managers were selling off European assets, which benefited the US. That trend has ended and is now being reversed,” Bott added.
Asian emotions are silenced
Asian markets were also on alert, with Japan’s Nikkei Stock Average falling 0.4%, but the economy grew at an annual rate of 0.2% in the fourth quarter, well below the expected 1.6% increase as government spending curbed economic activity.
The yen rose on Tuesday, while the dollar fell 0.4% to 153.51 yen. Japan’s currency has gradually recovered after hitting its lowest level since July 2024 in late January, amid investor concerns that Prime Minister Sanae Takaichi’s massive spending plans to revitalize the economy could harm the government’s long-term finances.
“The market is likely to assume that the weak fourth-quarter GDP data will facilitate Prime Minister Takaichi’s plans for additional fiscal support and food consumption tax cuts,” NAB analysts said in a research note.
The 20-year government bond yield fell 5.5 basis points to 3.025%. The 30-year bond yield fell 6 basis points to 3.025% as bond prices rose.
Markets in China, Hong Kong, Singapore, Taiwan and South Korea were closed on Tuesday for the Lunar New Year holiday.
The dollar index, which measures the U.S. currency’s performance against six other currencies, was mostly steady at 97.12 after rising 0.2% overnight.
Investors wary of US-Iran talks
Brent crude oil futures fell 0.5% to $68.14 a barrel, after rising 1.33% on Monday, on the back of expected OPEC+ supply increases and ahead of US-Iran talks aimed at easing tensions in Geneva.
U.S. West Texas Intermediate crude rose 0.35%, matching previous gains. This includes all price movements on Monday as no contracts were settled that day due to a US holiday.
“The market remains volatile due to geopolitical uncertainty, with investors looking at negotiations between the US, Iran and Ukraine pending this week,” ANZ analysts said.
“If tensions in the Middle East ease or meaningful progress is made in the Ukraine war, the risk premium currently built into oil prices could quickly disappear.”
Gold was down 0.82% at $4,950 an ounce, and spot silver was down 1.6%.
