Global Markets Rise as Oil Rally Lifts Energy Stocks Ahead of Big Tech Earnings

Global stock markets edged higher on Wednesday as surging oil prices boosted energy shares, while investors awaited quarterly earnings from U.S. technology giants Alphabet and Tesla that could shape sentiment around artificial intelligence (AI) investments.

European markets led gains, with the STOXX 600 index rising 0.6%, supported by strong performances from oil and gas companies after Brent crude climbed 3.5% to $94.22 per barrel, its highest level in six weeks.

Oil prices surged after two tankers transporting Saudi crude to Asia reportedly reversed course in the Red Sea following renewed threats from Yemen’s Iran-aligned Houthi rebels, raising concerns over global energy supplies.

Despite the broader market gains, U.S. futures weakened, with Nasdaq futures falling 0.6% and S&P 500 futures slipping 0.2% as investors looked ahead to earnings from Alphabet and Tesla.

Markets are closely watching Alphabet amid concerns over delays to a key AI model, while Tesla is expected to report its first quarterly cash burn in more than two years. Analysts say the results could influence investor confidence in the AI-driven rally that has supported global equities over the past two years.

Meanwhile, the Japanese yen recovered slightly after falling to a 40-year low against the U.S. dollar. The rebound followed reports that the Bank of Japan is increasingly concerned about rising inflation, fuelling speculation that interest rate hikes could come sooner than markets expect.

Japan’s Finance Minister Satsuki Katayama reiterated that authorities remain prepared to intervene in currency markets if necessary.

The combination of a weaker yen and higher oil prices pushed Japan’s imports to a record high in June, although exports also exceeded expectations, supported by strong demand linked to AI data centre investments.

Investors are also focused on upcoming monetary policy decisions, with the European Central Bank expected to announce its latest decision on Thursday, followed by the U.S. Federal Reserve next week. Both central banks are widely expected to keep interest rates unchanged for now, although markets continue to price in at least one rate increase before the end of the year.

Gold rose 1.1% to a two-week high as investors sought safe-haven assets amid geopolitical tensions and uncertainty surrounding global interest rates.

Source: Reuters

Reporters: Gregor Stuart Hunter and Johann M. Cherian