Market Analysis

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to see further upside after ending the previous well off their best levels of the day but still mostly higher.

Early buying interest may be generated in reaction to a steep drop by the price of crude oil, as U.S. crude oil futures tumble by more than 2 percent.

U.S. crude oil futures have slumped below $90 a barrel after President Donald Trump claimed the U.S. and Iran could reach a peace deal within “two or three days.”

Trump also told reporters the Strait of Hormuz would open “immediately” after an agreement is reached, although his previous claims that a deal is close have not come to fruition.

Traders may also look to continue to pick up stocks at relatively reduced levels following the sell-off seen last Friday.

Stocks showed a strong move back to the upside in early trading on Monday following Friday's sell-off but gave back ground over the course of the sessions. The major averages pulled back well off their highs of the session, with the Dow dipping into negative territory.

After surging by as much as 1.8 percent, the tech-heavy Nasdaq ended the day up 220.23 points or 0.9 percent at 25,929.66. The S&P 500 also rose 21.99 points or 0.3 percent to 7,405.73, but the narrower Dow slipped 80.77 points or 0.2 percent to 50,786.01.

The early rebound on Wall Street came amid bargain hunting following last Friday's plunge, which dragged the tech-heavy Nasdaq down to its lowest closing level in a month.

Buying interest waned over the course of the session, however, as crude oil prices remained elevated after Israel and Iran reportedly exchanged missile strikes over the weekend.

Crude oil prices pulled back well off their highs after President Donald Trump claimed Israel and Iran are "looking to do an immediate ceasefire."

"Final negotiations on 'Peace' are proceeding, subject to ignorance or stupidity getting in its way," Trump said in a post on Truth Social. "The Blockade will remain in place, and in full force and effect, until a 'Final Deal' is reached. Things should move quickly."

Despite the pullback by the broader markets, semiconductor stocks continued to see substantial strength, with the Philadelphia Semiconductor Index spiking by 5.6 percent after plummeting by 10.3 percent in the previous session.

Shares of Marvell Technology (MRVL) soared by 9.6 percent following news the chipmaker will be joining the S&P 500 along with electronics manufacturing services company Flex (FLEX).

Nvidia (NVDA) also jumped by 1.7 percent after the AI giant announced a multiyear technology partnership with SK hynix to advance next-generation memory for the global AI factory buildout and accelerate semiconductor design and manufacturing.

The increase by the price of crude oil also contributed to significant strength among oil service stocks, as reflected by the 3.6 percent surge by the Philadelphia Oil Service Index.

Oil producer and computer hardware stocks also ended the day notably higher, while interest rate sensitive utilities and commercial real estate stocks came under pressure amid a continued increase by treasury yields.

Commodity, Currency Markets

Crude oil futures are tumbling $1.99 to $89.31 a barrel jumping climbing $0.76 to $91.30 a barrel on Monday. Meanwhile, after slipping $1.90 to $4,363.40 ounce in the previous session, gold futures are inching up $2.10 to $4,365.50 an ounce.

On the currency front, the U.S. dollar is trading at 160.18 yen compared to the 160.17 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1573 compared to yesterday’s $1.1534.

Asia

Asian stocks advanced on Tuesday as geopolitical tensions eased and tech stocks rebounded on dip buying.

Risk appetite improved, the dollar weakened slightly and oil prices came off recent highs after Israel and Iran halted attacks on each other following a warning from U.S. President Donald Trump.

China's Shanghai Composite Index jumped 1.3 percent to 4,010.03 despite heightened U.S.-China tensions after the Pentagon accused some of Chinese biggest companies, including Alibaba, Baidu and BYD of supporting the Chinese military. Hong Kong's Hang Seng Index slipped 0.4 percent to 24,565.90.

Japanese markets ended sharply higher as chip-related stocks recovered from heavy losses in the previous session.

The yen held near a one-month low against the dollar after the Nikkei reported that the Bank of Japan may raise its short-term policy rate and consider halting bond tapering from April 2027 at its upcoming monetary policy meeting on June 15-16.

The government is ready to act decisively against excessive yen declines while remaining vigilant to rising bond yields that could hurt growth, Japan's Finance Minister Satsuki Katayama said in a news conference earlier in the day.

The Nikkei 225 Index surged 2.2 percent to 65,416.63 while the broader Topix Index settled 1.14 percent higher at 3,896.11. Advantest surged 4.3 percent and Tokyo Electron shares soared 8.9 percent.

Seoul stocks experienced a sharp rebound after leading a rout across Asia on Monday on woes over AI profitability and Fed rate hike expectations.

Investors cheered that that showed South Korea's economy expanded at a faster pace in the first quarterly than initially reported.

The Kospi Index spiked 8.2 percent to 8,096.93, marking the highest-ever daily increase after plunging more than 8 percent in the previous session. Among the top gainers, Samsung Electronics, SK Square and SK Hynix soared 9-16 percent.

Australian markets ended slightly lower after the release of somewhat disappointing consumer confidence and business sentiment readings.

The benchmark S&P/ASX 200 Index slipped 0.2 percent to 8,604.20, extending losses for a third consecutive session. The broader All Ordinaries Index closed 0.4 percent lower at 8,824.80.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rallied 1.3 percent to 13,204.08, reaching its highest level since May 29.

Europe

European stocks are broadly higher on Tuesday, as the dollar fell from a two-month high and Brent crude futures fell below $93 a barrel after Israel and Iran agreed to halt attacks against each other, boosting hopes that peace negotiations could move forward.

Investors also cheered data that showed China's exports and imports expanded rapidly in May.

Closer to home, German industrial output increased 0.4 percent on a monthly basis, in contrast to the revised 0.1 percent fall in March, Destatis reported.

The monthly growth rate came in line with expectations and marked the first monthly increase in five months.

A separate set of data revealed that German exports grew at a faster pace of 0.9 percent month-on-month in April, following March's 0.3 percent increase. Economists had forecast exports to fall 0.3 percent.

The French CAC 40 Index is up by 0.7 percent and the German DAX Index is up by 0.5 percent, although the U.K.’s FTSE 100 Index is down by 0.3 percent, dragged down by energy stocks such as BP Plc and Shell.

Shares of Technip, Airbus and Safran were moving higher after the French companies joined forces with Tereos to develop a sustainable aviation fuel production project in France.

U.K. scientific technology firm Oxford Instruments slumped 6.5 percent despite reporting full-year results slightly ahead of expectations.

Housebuilder Bellway jumped 3 percent after maintaining its FY26 profit outlook.

Keller Group surged 3 percent after securing a contract variation order worth $207mn for a flagship U.S. highway reconstruction project.

GSK tumbled 3.5 percent after the drugmaker agreed to buy U.S.-listed Nuvalent for $10.6 billion.

U.S. Economic News

The Commerce Department released a report on Tuesday showing the U.S. trade deficit narrowed roughly in line with estimates in the month of April.

The report said the trade deficit shrank to $55.9 billion in April from a revised $56.6 billion in March. Economists had expected the trade deficit to decrease to $55.8 billion from the $60.3 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports surged by 2.6 percent to $327.1 billion, while the value of imports jumped by 2.0 percent to $383.0 billion.

At 10 am ET, the National Association of Realtors is due to release its report on existing home sales in the month of May. Existing home sales are expected to increase to an annual rate of 4.08 million in May from 4.02 million in April.

The Treasury Department is scheduled to announce the results of this month’s auction of $58 billion worth of three-year notes at 1 pm ET.