Global stocks rally on AI optimism as oil slips amid Iran uncertainty

London: Global stocks rallied on Tuesday, buoyed by renewed optimism around artificial intelligence after Anthropic moved towards a US stock market listing, while oil prices and bond yields declined on hopes of a US‑Iran deal. Brent crude futures fell more than 1% to below $94 a barrel, trimming the previous session’s sharp gains, after US President Donald Trump said talks with Iran were continuing. His comments came despite reports that Tehran had suspended indirect negotiations with Washington to end hostilities, leaving investors cautious and underlining the fragility of the ongoing ceasefire. Europe’s STOXX 600 rose 0.7% by midday, supported by a strong forecast from chipmaker STMicroelectronics, which lifted technology stocks. AI enthusiasm Anthropic said on Monday it had confidentially filed for a US initial public offering, edging ahead of rival OpenAI in a closely watched race to public markets. Google parent Alphabet is also seeking to raise $80 billion in equity to fund the expansion of its AI infrastructure. “This speaks to the huge sums involved in keeping pace in the AI arms race. It represents a significant shift from a period of strong free cash flow to seeking market funding to support expansion,” said Russ Mould, investment director at AJ Bell. On the economic front, data from the Institute for Supply Management showed US manufacturing PMI rose to 54.0 in May from 52.7 in April, exceeding expectations to reach a four-year high. The increase was likely driven by companies bringing forward orders amid rising prices and supply concerns linked to the Iran conflict. Futures for the S&P 500 and Nasdaq 100 were down between 0.1% and 0.2%, pointing to a slightly softer opening after both indices recorded an eighth consecutive gain and fresh record highs on Monday. “That marks the first time in a year the S&P has achieved eight consecutive daily gains. A positive week would make it 10 straight weekly advances, something not seen since 1985,” said Deutsche Bank strategist Jim Reid. In Taipei, Nvidia CEO Jensen Huang said the company had sufficient supply to support strong growth in central and graphics processing units, though he acknowledged ongoing supply constraints. South Korean equities were volatile, with the benchmark KOSPI swinging sharply lower after hitting a record high, as major stocks such as Samsung Electronics and SK Hynix fluctuated. In currency markets, the dollar edged slightly lower. The euro, still 1.5% below its level at the start of the conflict, rose 0.1% to $1.1646. Data showed eurozone core inflation rising to 2.5% year-on-year in May, above expectations of 2.4% and April’s 2.1%. Markets are pricing in a quarter-point European Central Bank rate increase this month, with at least one more expected by year-end. In bond markets, the US 10-year Treasury yield fell nearly 5 basis points to 4.429%, while Germany’s 10-year Bund yield declined 6 basis points to 2.953%. Gold rose 1% to $4,527 an ounce.