Oil Jumps as U.S. Strikes Iran, Stocks Mixed Amid Election Uncertainty

Brent crude rose nearly 2% to $106.50 per barrel on Tuesday after the United States launched defensive strikes on Iranian targets in the Strait of Hormuz. This rebound followed a sharp decline earlier in the week, during which U.S. benchmark crude tumbled 8%. Energy prices remain volatile due to uncertainty regarding the end of the conflict with Iran. The U.S. attack specifically targeted Qeshm Island, a move that immediately reversed the downward trend in oil markets.

U.S. stock futures showed mixed results ahead of the midterm elections. The S&P 500 futures fell less than 0.1%, while the Dow Jones Industrial Average futures dipped 0.5%. The Nasdaq composite futures gained 0.25%. The election outcome could reshape President Donald Trump's remaining time in office, as Republicans and Democrats compete for control of Congress and key governorships. Voter disaffection over high prices is a central theme in this campaign.

Investment concerns in the artificial intelligence sector continue to grow. Critics argue that current share prices are inflated and constitute a bubble. There is increasing worry that the hundreds of billions of dollars Big Tech companies are investing in AI data centers will not generate sufficient productivity or profit to justify the cost. Apple, often viewed as a late entrant to the AI race, reported fourth-quarter revenue stronger than expected after the bell on Monday. However, its shares fell 4% in early Tuesday trading, driven by high global memory demand and expenses related to the new Siri AI.

Palantir also released its quarterly earnings after the bell on Monday. The company's stock dropped 8% in premarket trading following a reported slowdown in U.S. commercial bookings. Reports from Alphabet and other major technology firms indicate that AI investments may be straining their core businesses. Alphabet, the parent company of Google, spent more cash during the latest quarter as measured by free cash flow. It also reported slower-than-expected growth in its search business.

European markets opened lower on Tuesday. The CAC 40 in Paris fell 0.2% to 8,035.07. Britain's FTSE 100 slid 0.5% to 10,701.09. Germany's DAX declined 0.6% to 25,830.22. In Asia, South Korea's Kospi benchmark index fell 4% to 5,626.08. Memory chipmaker SK Hynix dropped 5.7%, and Samsung Electronics declined 4%, erasing gains from the previous day. Tokyo markets were closed for a holiday.

Hong Kong's Hang Seng index added 0.6% to 23,525.97. The Shanghai Composite index retreated 0.8% to 3,608.10, approaching its lowest level in over a year. Gains from market support measures announced on Monday proved temporary. Currency markets saw the U.S. dollar rise 0.2% against the Japanese yen to 158.28. The euro fell less than 1% to $1.1179. Markets are watching for continued profit growth from companies despite high inflation and elevated interest rates, a trend that helped push the S&P 500 to a record high last month.