European equities were poised to open lower on Tuesday, pressured by mounting political uncertainty after French Prime Minister Francois Bayrou was ousted on Monday. President Emmanuel Macron must now appoint the country’s fifth prime minister in under two years, with expectations pointing to another centrist ally. In corporate news, Dutch chipmaking giant ASML invested €1.3 billion in Mistral AI’s €1.7 billion funding round as lead backer, securing an 11% stake in the French startup. On the economic front, no major data releases are scheduled in Europe today. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures slipped around 0.3%.

Gold hit a fresh all-time high at around $3,650 per ounce on Tuesday, supported by mounting expectations of Federal Reserve rate cuts through year-end. An unexpectedly weak US jobs report last Friday led markets to price in three rate cuts this year, including a 25bps reduction at the Fed’s meeting next week. Investors are now awaiting the US PPI and CPI data, due later this week, which could provide further guidance on the Fed’s next steps. Beyond rate expectations, safe-haven demand for the precious metal is also underpinned by uncertainty tied to US tariffs and geopolitical risks. So far this year, gold has surged 39%, driven by US dollar weakness, strong central bank purchases, dovish monetary settings, and heightened global uncertainty.

The dollar index steadied at 97.4 on Tuesday, lingering near its weakest level in almost seven weeks as mounting concerns over a cooling labor market strengthened expectations for Federal Reserve rate cuts. Investors awaited US benchmark revisions for employment covering April 2024 to March 2025, with economists projecting downward adjustments of up to 800,000 jobs, a signal the Fed may be lagging in its mandate to maximize employment. Attention also turned to two key inflation reports due this week that could shape the next policy decision, with the August producer price index out Wednesday and the consumer price index on Thursday. Markets currently see an 89% chance of a 25 basis point cut at next week’s meeting, while some participants are positioning for a larger 50 basis point move.

WTI crude oil futures climbed above $62 per barrel on Tuesday, extending gains from the prior session, following OPEC+'s modest output hike and due to concerns over potential new sanctions on Russian oil. OPEC+ agreed on Sunday to raise its crude production by 137,000 bpd from October, much lower than previous monthly hikes of about 555,000 bpd for September and August and 411,000 bpd in July and June. The smaller increase highlights the group’s cautious stance as the market heads into an expected surplus. Meanwhile, US President Donald Trump said on Sunday he was ready to move to the second phase of restrictions against Russia after its heaviest aerial strikes on Ukraine since the war began, fueling worries about disruptions to global energy flows. However, gains in oil prices were limited after Saudi Arabia, the world’s largest crude exporter, lowered the price for all its crude grades to Asian buyers for delivery in October, signaling weaker demand.

The Nikkei 225 Index climbed 0.9% to surpass 44,000 while the broader Topix Index advanced 0.4% to 3,150 on Tuesday, with both gauges reaching fresh record highs after Prime Minister Shigeru Ishiba announced his resignation. Ishiba said Sunday he would step down following mounting divisions within the ruling party and weeks of pressure after his national election defeat late last year. The resignation also came as Japan struggled to secure trade concessions from the US. The two nations finalized a deal last week that lowered US auto tariffs on Japanese vehicles from 27.5% to 15%, while US-made cars will enter Japan without additional testing, alongside other measures. Gains were driven by technology stocks such as Advantest (+6.6%), Disco (+1.9%), and Tokyo Electron (+3.5%), while heavyweight industrial, financial, and consumer names also added support.

UK retail sales rose 2.9% year-on-year on a like-for-like basis in August 2025, accelerating from July’s 1.8% gain and beating market forecasts of 2%. This marked the strongest growth in four months, supported by warmer weather that boosted demand for food, furniture and back-to-school goods. However, much of the rise reflected higher food prices rather than stronger volumes. Food sales jumped 4.7% compared with a 1.8% increase for non-food categories, highlighting the continued impact of inflation on household spending patterns. Online sales also gained modestly, suggesting consumers remain cautious in discretionary purchases. The BRC noted that while August’s figures were encouraging, retailers are still wary of subdued consumer confidence ahead of the key Christmas trading period. The sector faces ongoing challenges from elevated borrowing costs, higher energy bills, and uncertainty over the government’s upcoming November budget.