On Tuesday, August 4, 2026, European stocks climbed alongside U.S. futures, reflecting cautious optimism despite heightened tensions between the U.S. and Iran. A recent attack on shipping in the Strait of Hormuz underscored risks to global energy supplies, contributing to market uncertainty.

Brent crude oil futures rose 1.4% to $84.95 a barrel, recovering from a 7% drop the previous session that marked a three-week low. Europe's STOXX 600 index increased by 0.55%, with technology stocks leading gains at 1.7%. In the U.S., Nasdaq futures rose 0.67%, and S&P 500 futures increased by 0.22%. The S&P 500 index had jumped 1.48% on Monday, reaching 7,610.04, close to its all-time high of 7,620.90, while the Dow Industrials closed at a record high.

Treasury yields climbed to a 19-year peak last week following comments from U.S. officials. According to LSEG data, nearly two-thirds of S&P 500 companies reporting second-quarter earnings have surpassed estimates, supporting a medium-term bullish outlook.

Market strategists are adjusting portfolios to favor sectors less vulnerable to rising interest rates, with technology and financials identified as preferred areas for increased risk exposure.

Thierry Wizman, global forex and rates strategist at Macquarie Group, noted that factors potentially supporting the unwinding of short yen positions include lower crude oil prices, anticipated Bank of Japan policy tightening starting in September, and moderation in Prime Minister Sanae Takaichi's fiscal plans aimed at restoring debt sustainability.

Sources