Global equity markets advanced on Tuesday as investors reacted to signs of progress in U.S.-Iran negotiations aimed at ending the conflict, while semiconductor shares rallied on continued artificial intelligence demand.
The UK’s blue-chip FTSE 100 rose 0.6% to 10,533.50 points, touching a one-month high, while the mid-cap FTSE 250 climbed 0.9% to its highest level since March 3, extending gains for a fourth straight session. Banking and mining stocks provided the biggest boosts, with HSBC, Barclays, and Lloyds all advancing, and Rio Tinto and Glencore rising around 1% as metals prices strengthened. In contrast, oil majors slipped: BP fell 1% and Shell lost 0.5% as crude prices declined on hopes of easing geopolitical tensions.
In the U.S., the Dow Jones Industrial Average gained about 92 points (0.18%), the S&P 500 added 0.54%, and the Nasdaq Composite surged more than 0.95%, driven by semiconductor stocks. Marvell Technology jumped nearly 9%, Micron Technology rose roughly 12%, and Pony AI gained over 4% after announcing plans to expand its robotaxi fleet. Eli Lilly also rose after acquiring three vaccine developers in deals worth up to nearly $4 billion.
The positive sentiment followed signs that Washington and Tehran were moving toward a memorandum of understanding that could halt the fighting and reopen shipping routes through the Strait of Hormuz. U.S. Secretary of State Marco Rubio said negotiations could “take a few days,” while Iran’s Tasnim news agency reported that Tehran sought the release of $24 billion in frozen Iranian funds. However, uncertainty remained after the U.S. conducted what it called “self defense” strikes in southern Iran, targeting missile launch sites and boats allegedly attempting to place mines.
Brent crude briefly rose 2% but stayed under $100 per barrel, and West Texas Intermediate traded around $92. Softer oil prices relieved some inflation fears, though a report showed British shop price inflation accelerated in May. Investors also monitored the Federal Reserve as new Chair Kevin Warsh faced the challenge of balancing inflation concerns with growth risks; markets now see an 8.5% chance of a July rate hike, up from less than 1% a month ago.
Wall Street remains near record highs, with the Dow hitting a new peak last week, supported by first-quarter earnings growth now expected at 29% year-over-year, according to LSEG data.
