European Midday Briefing: Shares Rise, Oil Rebounds as Middle East Uncertainty Remains

MARKET WRAPS

Stocks:

European shares rose strongly while oil bounced back as uncertainty over U.S.-Iran talks remained.

President Trump said Monday Iran was "unbelievably duplicitous," claiming Tehran had asked for talks on ending the war before denying discussions were taking place.

"We are still positive that a deal will be reached eventually as both the U.S. and Iran do not want to go an all out war," Jefferies said.

Oil prices rebounded after Monday's selloff, with Brent crude up more than 1% to trade just shy of $85 a barrel.

" Oil sold off sharply yesterday

on optimism that a Middle East deal might be within reach," ING said. "However, markets may be getting ahead of themselves once again [...] We've been in this situation multiple times before, only to see things unravel."

Goldman Sachs expects Brent to remain in its $80-$90 range

until either a new U.S.-Iran deal is reached or the conflict escalates significantly.

U.S. Markets:

Stock futures were up Tuesday as investors were awaiting the June JOLTs report on job openings due today.

" Markets continue to assess the outlook for U.S. monetary policy

following last week's Federal Reserve meeting," ING said. "While policymakers kept rates unchanged, uncertainty over the policy path remains elevated as investors weigh persistent inflation risks against signs of moderating economic momentum."

Forex:

The euro traded flat.

The currency could struggle to rise against the dollar as it looks modestly overvalued, ING said.

The dollar rose

as renewed concerns over the U.S.-Iran tensions lifted oil prices and the impact of recent U.S.-Japanese joint interventions to support the yen starts to fade.

Bonds:

Eurozone government bond yields were little changed , tracking a similarly steady trade in Treasury yields. Developments in the Middle East remain the key driver for government bonds.

From a seasonal perspective, Morgan Stanley's framework points to a continuation of the 10-year Bund rally that typically begins in June and extends through August. "This year, however, the pattern has struggled to materialize, with markets remaining focused on developments in the Middle East."

Treasury yields were stable to slightly higher in early trade, driven by the long end of the curve, as inflation fears due to energy prices continue to prevail.

The 10-year Treasury note

was trying to find some footing in the 4.715-4.805% [yield] support zone, J.P. Morgan said. "The tentative rebound triggered a momentum divergence buy signal, but the lack of deep oversold conditions leaves us hesitant to fade the weakness at this point."

Energy:

In early European trading, Brent crude was up 1.3% and WTI was up 0.6%. The benchmarks settled 4.7% and 5.1% lower, respectively, in the previous session after Iran rejected President Trump's suggestion that talks were under way.

Metals:

Gold prices rose in early European trading as investors weighed mixed signals on U.S.-Iran talks and awaited a series of U.S. jobs data this week.

Iron ore

Iron ore prices were volatile early Tuesday while analysts were expecting further downside pressure from weak fundamentals. Global iron-ore shipments remained elevated, leading to a continued buildup in port inventories, Everbright Futures said.

EMEA HEADLINES

BP's Oil Profits Surge as Fossil Fuel Pivot Continues With Plan to Offload U.S. Biogas Unit

BP posted higher profits on a strong oil trading performance and higher energy prices, and put its U.S. biogas business up for sale as it continues its pivot back to fossil fuels.

The British oil major reported an underlying replacement cost profit-a similar metric to the net income that U.S. oil companies report-of $5.73 billion for the second quarter of the year, surging from the $3.2 billion it reported in the first quarter.

HSBC Posts Sharply Higher Quarterly Profit, Plans $1 Billion Share Buyback

HSBC Holdings reported a surge in second-quarter net profit on stronger earnings across its businesses and resumed its share buybacks with an up to $1 billion plan.

The London-based bank said Tuesday that net profit jumped for the three months ended June, exceeding analysts' estimates, as pretax profit increased across its four key segments, rising especially sharply in the business of supporting affluent clients with their finances.

Saudi Aramco Profit Jumps 33% on Higher Oil Prices Amid Iran War

Saudi Arabia's national oil company reported a 33% jump in second-quarter profit as higher crude prices lifted earnings despite lower sales volumes amid disruption to shipping through the Strait of Hormuz.

Saudi Arabian Oil Co., known as Aramco, the world's top oil exporter, posted adjusted net income of $33.4 billion for the three months through June compared with $25.2 billion in the same period last year.

Bayer Swings to Net Profit on Smaller Litigation Charges

Bayer swung to a net profit for the second quarter after it booked smaller litigation charges, and said it is making progress toward its goal of resolving legal challenges.

The German agriculture and pharmaceutical conglomerate said Tuesday that net profit was 219 million euros, equivalent to $252.1 million, compared with a loss of 199 million euros for the same period last year, when its results were hit by litigation charges.

GLOBAL NEWS

The AI Boom Is Transforming the American Economy Beyond Recognition

The U.S. economy keeps putting more eggs in the artificial-intelligence basket.

Tech companies are spending hundreds of billions of dollars to meet AI computing needs and issuing billions of dollars of debt to help make those purchases.

Iran Says No Talks With the U.S. on Hormuz Strait

Iran said Monday that there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.

Trump said over the weekend that he had prepared to greenlight what he described as the biggest military attack since World War II before America's allies intervened.

Why Bessent Is Leaning on the Fed to Help Prop Up Japan's Currency

A little-used Federal Reserve backstop built for the 2020 dollar shortage is being put to a use it was never designed for: bankrolling Japan's defense of the yen. Treasury Secretary Scott Bessent wants the backstop made bigger.

Japan said Monday it planned to draw on the facility, a day after Bessent publicly encouraged the Fed to expand it. The arrangement would let Tokyo raise dollars to halt the yen's slide without selling the U.S. government debt that would otherwise pay for it.

Iran Says No Talks With the U.S. on Hormuz Strait

Iran said Monday that there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.

Trump said over the weekend that he had prepared to greenlight what he described as the biggest military attack since World War II before America's allies intervened.

Taiwan and U.S. Promote Cooperation in Answer to Trump and China

TAIPEI-Taiwan is opening up about long-concealed U.S. military training while Americans note their cooperation with the island, sending a message to China that ties are strong despite comments by President Trump that appeared to put the relationship in jeopardy.

Taiwan's military collaboration with the U.S. "is far closer than you might imagine," Defense Minister Wellington Koo told a small group of reporters, a rare recognition of a secretive American role in helping Taiwan strengthen its defense and deter China.

Migrant Crisis Pits Spain's Leader Against Critics Across Europe

As most migrants left a tiny Spanish territory in North Africa this weekend, Prime Minister Pedro Sánchez pivoted to a new crisis-one playing out in Europe's halls of power.

His country had just experienced an extraordinary breach of sovereignty, with some 50,000 migrants illegally pouring into Ceuta from neighboring Morocco.

How ICE Is Weaponizing Social Media Against Its Critics

Tired_Thumb is far from alone.

In recent months, ICE has deployed a round-the-clock digital dragnet to scour the public internet-from Facebook to Instagram to X-for speech that could endanger the agency's mission. The government has paid millions to private contractors to surface everything from potential threats to agents to activities that could disrupt ICE's operations, according to federal documents, contractors and former Homeland Security Investigations agents.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

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August 04, 2026 05:09 ET (09:09 GMT)

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