AI leads market trends, Marvell rises over 14% in after-hours trading, gold up 1%, aluminum hits four-year high, Bitcoin falls below 70,000.

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Global stock markets regained lost ground after a brief decline, as renewed buying in AI-related stocks boosted risk appetite. Meanwhile, Iran announced a suspension of talks with the US, escalating tensions in the Middle East and intensifying the impact of geopolitics on the markets.

The MSCI Global Index edged up 0.1%, remaining near historic highs, after intraday losses of up to 0.2%. Asian stocks rebounded from a maximum 1% drop to rise 0.3% overall, with South Korea's Kospi—viewed as an AI investment indicator—gaining 0.1% to erase all declines. Nasdaq 100 futures narrowed their losses to 0.3%, Marvell surged over 14% in after-hours trading, and European stock futures extended gains to 0.6%, showing a return of tech buying and significant improvement in market risk sentiment.

In commodities markets, Brent crude hovered near $94 a barrel, while gold rose about 1% to $4,523 per ounce. Aluminum prices climbed for four consecutive days, with LME aluminum reaching $3,775 per ton at one point, the highest since 2022; copper also rose 0.5% to $13,899.50 per ton. Iran's suspension of talks—citing Israeli military actions in Lebanon—increased market concerns over potential disruptions in the Strait of Hormuz supply.

Vantage Global Prime analyst Hebe Chen said: "AI trading hasn't ended, but after such a stretched rally, it is extremely sensitive to any headlines that might reignite the oil-inflation-rates chain reaction—something the market took three months to escape."

Nikkei 225 closed down 0.3% at 66,734.24; Topix index down 0.4% at 3,924.24. Kospi up 0.1%, erasing all losses.Nasdaq 100 futures narrowed losses to 0.3%. Marvell up over 14% in after-hours. European stock futures extended gains to 0.6%.Japan's 10-year government bond yield fell after strong bond auction demand, US treasuries also strengthened modestly.Yen remained near 159.70 against the dollar.Gold up about 1% at $4,523/oz.Brent crude hovered near $94/barrel.Aluminum prices climbed for four days; LME aluminum early session reached $3,775/ton, a new high since 2022.Copper rose 0.5% to $13,899.50/ton.Bitcoin down 1.4% at $70,386.76.

AI Leads Market Activity, Semiconductor Index On Track for Strongest Quarter Ever

Persistent strong demand for AI-related stocks is a key driver for record-breaking performance in global equity markets this year, and has partially offset volatility caused by Middle East tensions. The S&P 500 recorded its eighth consecutive daily gain on Monday, the longest streak since May 2025. The Philadelphia Semiconductor Index (SOX) has soared about 70% in the past two months, on track for its strongest quarterly performance in history; the chip sector is this year's best performer in the S&P 500.

However, some investors have begun to remain cautious about stretched valuations. Vikas Pershad, portfolio manager at M&G Investments, told Bloomberg TV: "The gains we have witnessed have exceeded our expectations. The direction is not surprising, but given current levels, we have cut our allocation to memory chips."

Bloomberg strategist Garfield Reynolds also warned of risks: Over the past year, momentum has dominated equity markets, meaning each sharp decline in major indices could trigger sustained downturns; if substantial macro risks emerge, the AI-driven rally may face cooling pressure.

Middle East Escalation, Aluminum Spot Premium Hits Highest Since 2007

Aluminum prices have accumulated a roughly 25% gain this year, with Middle East conflicts as a major driver. The region is a global aluminum smelting center, and war has forced several local smelters to shut down or cut production. Iran's latest announcement to suspend talks further heightens uncertainty about regional supply prospects. Investors also remain bullish on industrial metals, flowing into copper and aluminum markets.

Tightness in spot markets is clearly reflected in futures structure: On Monday, the spot contract premium for LME aluminum over three-month futures surged to $111.75 per ton, the highest since 2007, indicating a rapidly widening gap in near-term supply and highly urgent demand for prompt delivery.

Confusing Signals from Peace Talks, Oil Price Drives Inflation Expectations

On Tuesday, Brent crude retreated slightly near $94 per barrel, after Monday's gains following contradictory accounts of a phone call between President Trump and Israeli Prime Minister Netanyahu regarding the Lebanon conflict. Both sides gave conflicting statements, the latest evidence of repeated contradictions surrounding recent ceasefire negotiations. Trump continues to claim talks are progressing and an agreement is near, while Iran last week rejected reports of a pending interim deal and on Monday said it would coordinate actions with its proxies.

Jason Pride and Michael Reynolds of Glenmede said: "Expectations for a US-Iran agreement remain in flux. Recent conflict events and contradictory statements from both sides indicate that key details remain unresolved."

Other news: The White House announced that tariffs on combines and other agricultural machinery will be lowered to reduce production costs for US farmers and manufacturers.

Yen Stabilizes, US Employment Data in Focus This Week

In currency markets, the yen remained near 159.70 against the dollar. Japan's Finance Minister Satsuki Katayama said authorities are ready to intervene in foreign exchange markets if needed, following last Friday's release of monthly intervention data. Japan's 10-year bond yield fell after a strong auction, as investors were attracted by high yields despite ongoing uncertainty in the Middle East; US treasuries also strengthened modestly. Among Asia's main markets, the Nikkei 225 closed down 0.3% at 66,734.24, Topix down 0.4% at 3,924.24.

Densely released US economic data this week is another major market focus, with the highlight being Friday's May non-farm payrolls report. Investors hope for insight into US economic health and clues about policy direction under new Fed Chair Kevin Warsh. ING FX Strategy Head Chris Turner wrote Monday that the market is increasingly forming judgments that US economic growth is re-accelerating as AI investments spill into wider sectors, and expects this week's data to support the narrative that "the Fed can comfortably maintain full employment targets while focusing its policy on inflation risks."

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