The recent escalation of hostilities between the U.S. and Iran has led to a risk-on sentiment in early trading across Asia and European futures, with oil prices rising sharply. This follows American military strikes against Iranian targets, which were aimed at protecting U.S. troops and commercial shipping in the strategically vital Strait of Hormuz.
Iran's Revolutionary Guards have retaliated by targeting a U.S. airbase, heightening fears of further conflict. Federal Reserve governors Neel Kashkari and Austin Goolsbee discussed the inflationary pressures stemming from the Middle East conflict, with Goolsbee warning of a 'stagflationary shock' in Asia due to rising energy prices.
Additionally, the EU is reportedly working on a plan to reduce its reliance on U.S. technology, which could impact the tech sector. In corporate news, Lamborghini's CEO defended the decision to cancel its electric vehicle project amid backlash against Ferrari's new EV, which has negatively impacted its market capitalization.
Meanwhile, Nio, a Chinese electric vehicle manufacturer, saw its shares rise over 10% following the launch of a new model, indicating strong market interest despite competitive pressures. Lastly, a Google employee has been charged with insider trading related to Polymarket, highlighting ongoing regulatory scrutiny in the tech industry