European Equities Mixed; US Futures Up Ahead of Earnings; Oil Plunges on OPEC+ Hike

Lead European markets are showing mixed performance, with US equity futures advancing ahead of key earnings reports. Crude oil prices have plunged following an OPEC+ agreement to increase September output. Geopolitical tensions persist after Iran shot down a US drone. Session narrative European equities are mixed this morning, with the Euro Stoxx 50 up 0.14% while the German DAX is down 0.16%. US equity futures are broadly higher, with S&P 500 futures up 0.53% and Nasdaq futures gaining 0.33%. The US 10-year yield is up 1.76% to 4.75%. In commodities, WTI crude has plunged 5.81% and Brent crude is down 4.67% after OPEC+ agreed to a September oil hike. Gold is up 0.07% while silver has gained 0.82%. The dollar index is down 0.09%. Geopolitical concerns remain elevated after Iran shot down a US drone over the Strait of Hormuz. Several M&A deals are in focus, including Indivior acquiring Supernus and KKR buying Integer. Fed's Williams reiterated support for the current policy stance, expecting Middle East-driven price pressures to fade. Cross-asset check Equity futures are showing strength in the US, with S&P futures up 0.53% and Nasdaq futures up 0.33%. European indices are mixed. The US 10-year yield has risen 1.76% to 4.75%. In the FX market, the dollar index is down 0.09%. USD/JPY is down 0.33% while EUR/USD is down 0.01%. Commodities are seeing significant movement, with WTI crude down 5.81% and Brent crude down 4.67%. Gold is up 0.07% and silver has gained 0.82%. Copper is up 0.95%. Themes & continuing stories Geopolitical tensions remain a key theme, highlighted by Iran shooting down a US drone and dismissing talks with the US. This contributes to ongoing uncertainty, particularly in energy markets. M&A activity is prominent, with several significant deals announced: Indivior is acquiring Supernus, and KKR is buying Integer for $127 per share. These deals indicate continued corporate restructuring and consolidation. Central bank policy continues to be a focus, with Fed's Williams reaffirming the current policy stance and expressing confidence in returning inflation to 2%. He also noted that Middle East-driven price pressures are expected to ease. The potential economic impact of a US ban on Chinese AI models is also a developing story, with reports suggesting significant costs for US businesses. What’s ahead Looking ahead, Palantir Technologies is scheduled to report its second-quarter earnings after the market closes today. Investors will be closely watching whether the AI software company can sustain its rapid growth and justify its premium valuation. The broader implications of a potential US ban on Chinese open-weight AI models are also being assessed, with estimates suggesting US businesses could face $3 billion to $12 billion in higher annual costs.