Global stock markets posted a mixed performance in yesterday's trading session, as investors attempted to balance supportive economic signals from the United States — most notably inflation slowing by more than expected — against rising geopolitical risks in the Middle East, climbing oil prices, and anticipation of major corporate earnings for the second quarter.
In the United States, lower-than-expected inflation data bolstered bets that the Federal Reserve may adopt a less hawkish monetary stance in the coming period, boosting investor appetite for technology and large-cap stocks, even as the market assessed the performance of American banks and quarterly corporate results.
The S&P 500 and Nasdaq opened higher in yesterday's session, with the S&P 500 rising about 0.28% to 7,536.7 points, while the Nasdaq Composite gained 0.55% to 26,015.49 points.
The Dow Jones Industrial Average, by contrast, fell about 452.3 points, or 0.86%, at the open to reach 52,046.36 points, weighed down by pressure on some large-cap stocks.
The gains followed the release of inflation data that eased investor concerns about continued monetary tightening, reinforcing expectations that the Federal Reserve could adopt a more flexible approach to interest rates.
All European indices declined at the start of yesterday's trading as tensions between the United States and Iran intensified and investors grew anxious, closely tracking the quarterly earnings of companies such as oil major BP and telecoms equipment maker Ericsson to gauge the conflict's impact on corporate performance.
The pan-European Stoxx 600 index fell 0.4% to 638.17 points by 08:10 GMT, with the travel and leisure sector leading sectoral losses with a decline of 2%. Shares in airlines Air France and Lufthansa, both sensitive to energy prices, each fell around 2%.
Brent crude rose 2.6% to $85 per barrel after the United States launched airstrikes for the third consecutive night against Iran, and President Donald Trump announced a naval blockade on Iran along with a 20% tariff to protect the Strait of Hormuz.
This move adds a fresh challenge for companies and investors when assessing the health of the economy and corporate prospects for the remainder of the year, coming just weeks after a Middle East agreement that appeared to have brought the fighting to an end.
Ericsson shares fell 8% after the Swedish telecoms equipment maker's quarterly sales came in slightly below expectations and the company warned of rising component costs. Energy stocks led sectoral gains, rising 1.4% alongside higher oil prices.
BP in London benefited from the sharp rise in oil prices earlier this year during the Iran conflict, and its shares gained 3% after the company said oil trading results are expected to be slightly higher in the second quarter compared with the previous quarter.
Evotec shares plunged 30% after the German drug development company cut its 2026 outlook.
Meanwhile, Japanese indices closed higher yesterday, supported by a rebound in technology companies.
The Nikkei rose, buoyed by dip-buying and positive momentum coming from the technology-dominated South Korean market. The Nikkei ended up 0.74% at 67,743.50 points at the close, reversing an earlier decline of 1.45%.
The broader Topix index gained 0.79% to close at 4,038.98 points. Shares had broadly declined in the morning, affected by an overnight fall in the US market after the resumption of hostilities between the United States and Iran sent oil prices sharply higher.
The Nikkei's direction shifted to the upside in the afternoon, in tandem with a recovery in South Korea's Kospi index, as the correlation between the two markets has strengthened in recent times.
Maki Sawada, equity analyst at Nomura Securities, said: