US equity futures were slightly higher on Tuesday, extending their rebound on fresh stability for the technology sector and lower inflationary risks. Contracts for the S&P 500 and the Nasdaq 100 were slightly higher, while the Dow was due for another record at 52,250. AI companies mostly recovered from their selloffs last week to indicate the market retook its long position in the AI trade, spurred by strong guidance from chip producers, despite concerning levels of spending for hyperscalers. Nvidia, AMD, and Intel were up to 1% higher premarket. Meanwhile, oil prices consolidated near their pre-war levels to ease the likelihood that the Federal Reserve would be forced into a hiking cycle. The improved backdrop for the corporate sector supported traditional sectors of the economy that have more exposure in the Dow, driving the index to outperform others in June. Still, the S&P 500 was set to gain 14% in Q2, the strongest quarter in six years.

Crude oil traded near $70.7 per barrel on Tuesday, recording a roughly 30% drop in Q2, which represents its largest quarterly decline since 2020. This plunge follows a surge in supply as traffic accelerated through the Strait of Hormuz after progress toward a peace deal released oil previously trapped inside the Persian Gulf. Additionally, US sanction waivers granted to Iran have introduced extra volumes into a market already trying to absorb major supply workarounds. Diplomatic efforts continue as Washington and Tehran send delegations to Doha for negotiations to end the four-month war, though Iran has ruled out direct talks. Meanwhile, Iran maintains its stance on controlling maritime traffic through the waterway. Iranian officials expressed a desire to co-regulate the strategic channel with Oman, but affirmed that Tehran will advance its own regulatory plans independently if necessary to oversee the strait's picking up flows.

Germany’s retail sales rose 1.1% month-on-month in May 2026, rebounding from a revised 0.4% decline in the previous month and defying market expectations for a 0.1% fall. It marked the biggest growth since June last year, suggesting that consumer spending regained some momentum despite ongoing economic uncertainty. The upturn was supported by broad-based gains across major categories, with food sales rising 1.1% and non-food sales increasing 1.0%. Meanwhile, online and mail-order retailing jumped 3.4%, indicating resilient demand through e-commerce. On an annual basis, retail sales advanced 1.8%, swinging from a revised 0.6% decline in April and marking the strongest annual growth in five months.

Gold held above $4,000 an ounce in volatile trade on Tuesday, but was still on track for a fourth consecutive monthly decline amid Middle East uncertainties and expectations that the Fed will raise interest rates this year. Markets continue to price in at least one rate hike by the Fed this year, with the first potentially coming as soon as September, while some investors are betting on additional hikes thereafter. The precious metal has declined about 11% this month and roughly 14% this quarter. Investors are now awaiting the latest US monthly employment report for fresh clues on the policy outlook. Meanwhile, US and Iran are scheduled to resume peace talks in Doha, Qatar later today, although prospects for a lasting ceasefire remain unclear. A major sticking point remains after Tehran reiterated its plan to oversee traffic through the Strait of Hormuz even if Oman decides not to take part.

China’s official NBS Manufacturing PMI increased to 50.3 in June 2026 from 50.0 in the previous month, surpassing market expectations of 50.1. It was the third consecutive month of expansion in factory activity so far this year, supported by strong high-tech manufacturing exports linked to the AI boom, even as shipments of other goods remained weak alongside subdued domestic demand. Output growth accelerated (51.4 vs 51.2 in May), while new orders expanded after contracting in the previous month (51.2 vs 49.9), with foreign orders also returning to expansion (50.1 vs 48.6). However, employment remained subdued (48.4 vs 48.6), while purchasing activity returned to expansion (51.4 vs 49.8) and supplier delivery times lengthened, albeit at a slower pace (49.9 vs 49.2). On the price front, input cost inflation eased to a six-month low (54.2 vs 60.5), while output prices fell for the first time in six months (48.2 vs 51.9). Finally, business sentiment strengthened slightly (54.3 vs 53.9).

The Japanese yen weakened beyond 162 per dollar on Tuesday to its lowest level since 1986, raising concerns among policymakers and keeping investors alert for potential currency intervention by Tokyo. The yen remained under pressure as the wide interest rate gap between Japan and the US persisted, with the Bank of Japan continuing its gradual policy normalization while the Federal Reserve is expected to deliver multiple rate hikes this year. Ongoing carry trades and sustained demand for the US dollar as a safe-haven currency also continued to weigh on the yen. Meanwhile, Japan's economy remained exposed to disruptions in energy supplies due to its heavy dependence on Middle Eastern oil imports. On the economic front, industrial production in Japan rose less than expected in May, underscoring the impact of Middle East tensions on supply chains and energy costs.