European and Asian stock markets rose on Tuesday as technology shares recovered from recent losses and investors grew more hopeful about an end to the Iran war. Falling oil prices also supported sentiment ahead of the latest US inflation figures.

London’s FTSE 100 gained 0.73 per cent shortly after opening, while France’s CAC 40 advanced 1.20 per cent and Germany’s DAX rose 1.14 per cent. US stock futures also edged higher following a broad rally on Wall Street on Monday.

Technology companies led gains across Asian markets, reversing some of the losses recorded after Democratic victories in last week’s US midterm elections raised concerns about tighter regulation of the technology sector.

South Korea’s Kospi surged 4.5 per cent, supported by strong performances from chipmakers SK Hynix and Samsung Electronics. Japan’s Nikkei 225 climbed 2.9 per cent, while Taiwan’s Taiex gained 2.5 per cent. Markets in Hong Kong and Shanghai also advanced.

Taiwan Semiconductor Manufacturing Company (TSMC), a major supplier of chips used in AI systems, reported a 59.7 per cent increase in October revenue from a year earlier, reinforcing expectations of continued demand for advanced semiconductors.

Shares in SoftBank Group, a major OpenAI investor, jumped 13.9 per cent ahead of its earnings announcement after falling to a one-year low on Monday.

Despite the recovery, investors remain concerned about whether the enormous sums being spent on AI infrastructure will generate sufficient returns. Companies such as Amazon, Microsoft and Apple recorded gains in New York, but market attention is increasingly shifting towards the profitability of data centre investments.

Russ Mould, investment director at AJ Bell, said markets had moved quickly from signs of panic to renewed optimism. However, Stephen Innes of SPI Asset Management cautioned that the latest gains did not necessarily indicate a full recovery in investor confidence.

Innes said suppliers receiving large technology investment orders had outperformed the companies financing the projects, suggesting investors were becoming more selective about the AI sector.

In currency markets, the US dollar traded at 157.91 Japanese yen, while the euro slipped to $1.1249.

Oil declines as Iran peace prospects improve

Oil prices extended their losses as traders assessed the possibility of an end to the conflict involving Iran. Brent crude fell more than 2.5 per cent to around $90 a barrel, while US West Texas Intermediate traded near $84.70.

The declines followed Monday’s fall of almost 6 per cent in Brent. Both benchmarks have lost around 20 per cent this month amid expectations that diplomatic efforts could ease supply disruptions.

US President Donald Trump said there was positive momentum towards ending the war after meeting Qatar’s prime minister at the White House. He described further military strikes as unlikely, although he did not rule them out.

Mould said investors increasingly believed Trump would seek a way to end the conflict following the midterm election results. A reduction in tensions could ease energy costs for households and businesses.

China’s trade figures also attracted attention, with exports rising 35.2 per cent in October and imports increasing 41.6 per cent. Its trade surplus for the first 10 months of 2026 had already exceeded $1 trillion.

European shares opened sharply lower on Friday as a heavy sell-off in US technology stocks spread across global markets, with investors concerned that political opposition to artificial intelligence data centres could slow the industry’s expansion.

The S&P 500 companies lost a record $2.9 trillion in market value on Thursday. In early European trading, the Stoxx Europe 600 fell 1.2%, Germany’s DAX dropped 1.6%, while France’s CAC 40 and London’s FTSE 100 each declined 1.4%.

The MSCI AC Asia Index fell more than 4% as investors sold AI-related and semiconductor shares. However, US futures pointed to a possible pause, with Nasdaq-100 futures rising 1.5% at around 10:15 CET.

Markets were assessing whether sweeping Democratic victories in this week’s US midterm elections could result in tighter restrictions on data centre construction. Opposition to the projects has grown across political lines, with several successful candidates pledging to slow or stop new developments.

Market intelligence firm Cleanview estimates that about 40% of planned US data centre capacity is located in states where governors or governors-elect have pledged or already introduced pauses on new projects. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez also proposed a federal moratorium earlier this year.

The uncertainty has raised questions about whether technology companies will earn sufficient returns on the hundreds of billions of dollars invested in AI infrastructure. Higher borrowing costs could also make construction more expensive, potentially reducing demand for chips and electricity.

Chipmakers lead global market declines

The Philadelphia Semiconductor Index plunged 12.2% on Thursday, marking its largest one-day fall since 2020. The index was down around 16% for the week through the close.

The Nasdaq Composite lost 5.5%, the S&P 500 fell 4.4% and the Dow Jones Industrial Average declined 3.4%. All three recorded their steepest daily percentage losses since US President Donald Trump announced sweeping tariffs in April 2025.

Stuart Clark, a portfolio manager at Quilter, said the declines highlighted the dependence of major US stock indices on a relatively small number of large technology and semiconductor companies.

The sell-off also reduced the fortunes of prominent technology executives. Nvidia chief executive Jensen Huang’s net worth fell by $15.1 billion, while Elon Musk’s dropped by $79.7 billion, according to the Bloomberg Billionaires Index.

Asian chipmakers also suffered heavy losses. Japan’s Nikkei 225 closed 6% lower, while South Korea’s Kospi fell 6% after an earlier decline of as much as 8.8% triggered a 20-minute trading halt. SK Hynix shares dropped 10.4% and Samsung Electronics lost 6.4%.

Taiwan’s Taiex finished 4.5% lower, with TSMC shares down 4.7%. Hong Kong’s Hang Seng was about 1.1% lower at the midday break, while Shanghai’s Composite declined 1.1%.

Neil Wilson of Saxo Markets described the sell-off as potentially excessive but said investors would first want to see markets stabilise.

Elsewhere, Bloomberg reported that Dutch bank ING was seeking to sell a portfolio of data centre loans worth about $500 million. Brent crude traded just below $99 a barrel, while government bonds gained as investors sought safer assets. The US 10-year Treasury yield fell six basis points to 4.84%, and the euro slipped 0.3% against the dollar to $1.1188.

BMW reported a decline in third-quarter profits on Wednesday, a day after issuing its second profit warning of the year as mounting competition from Chinese carmakers and restructuring costs put pressure on the German manufacturer’s business.

The company’s pre-tax profit fell 11% in the three months to September, while net profit dropped around 15% to €1.45 billion. Revenue declined almost 6% to €30.45 billion, BMW said.

The latest warning, announced on Tuesday, followed higher restructuring expenses, including the planned elimination of around 8,000 jobs in Germany. BMW said these costs could push its core automotive division close to break-even, or into an operating loss, for the full year.

The operating margin in the car division fell to 3.4% in the third quarter, compared with 5.2% in the same period last year. BMW now expects the division’s full-year operating margin to range between minus 0.5% and plus 0.5%, a sharp reduction from its previous forecast of 1% to 3%.

BMW chief executive Milan Nedeljkovic said the company needed to respond quickly to changes across the automotive industry.

“Current developments in our industry call for decisiveness and swift implementation,” he said. “We will therefore specifically intensify and accelerate structural measures.”

The pressure reflects wider challenges facing German manufacturers, including Mercedes-Benz and Volkswagen, which are also reducing costs and jobs. Chinese carmakers have gained ground in their domestic market with competitively priced vehicles and advanced technology, while expanding their presence in Europe.

BMW’s difficulties have been particularly pronounced in China, traditionally one of its most important markets. Vehicle deliveries there fell 24.8% in the third quarter, extending a decline that has already taken sales to their lowest level since 2017 last year.

The drop in China contributed to a 6.3% decline in BMW’s global deliveries during the quarter. Sales moved in the opposite direction in other major markets, rising 2.6% in Europe and 2.5% in the United States.

The group, which owns the BMW, Mini and Rolls-Royce brands, is seeking to regain ground in China by shifting more of the supply chain for vehicles made there to local suppliers. The strategy is intended to improve competitiveness and respond more closely to customer demand in the market.

The latest results add to concerns about the outlook for Germany’s automotive industry, which faces pressure from weaker demand, high production costs and the rapid expansion of Chinese competitors.

Despite the profit warning and weaker quarterly performance, BMW shares rose around 2% from Tuesday’s closing level by 11 a.m. Central European Time on Wednesday.