Stocks rallied on Tuesday, extending a technology-led surge on Wall Street, as investors took advantage of lower prices following last week's rout. Falling oil prices added to the upbeat mood.
European shares were higher on Tuesday, following gains in Asia and a rally in US stocks, while investors awaited October US inflation data.
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European stocks rose in early trading on Tuesday, extending Monday's jump. A little after the open, the UK’s FTSE 100 was up 0.73%, France’s CAC 40 gained 1.20%, and Germany’s DAX advanced 1.14%.
US futures edged higher, and oil prices fell at the same time.
“It’s quite remarkable to think investors were showing signs of panic less than a week ago, and now markets are merrily pushing higher as if there’s nothing to worry about,” says Russ Mould, investment director at AJ Bell.
Previously in Asia, AI-linked firms led gains across stock markets, in stark contrast to the battering they took following last Tuesday's Democratic sweep of Congress, which stoked regulatory concerns.
However, traders remained concerned about profitability given the vast sums pumped into the sector. They were also watching Nvidia following reports of an investigation into whether chief executive Jensen Huang had been targeted by a foreign intelligence operation.
Nvidia’s shares traded 1% higher in pre-market trading despite the US president saying the FBI was looking into CEO Jensen Huang’s involvement with an alleged Chinese spy.
Commenting on the rise, Mould said: “Certain investors might have taken the view that whatever happens to Jensen Huang, the company will continue to dominate the AI chip space.”
Tech giants including Amazon, Microsoft and Apple were among the big gainers on Monday in New York as tech bounced back with help from bargain-hunting, with observers pointing out that confidence in the AI outlook remained solid.
Global demand for AI chips remains robust. Taiwan Semiconductor Manufacturing Co. (TSMC), which makes chips used in AI systems, reported on Tuesday that its October revenue rose 59.7% from a year earlier.
Taiwan's Taiex jumped 2.5%. South Korea's benchmark Kospi surged 4.5%, thanks to strong advances in chipmakers SK hynix and Samsung, while Japan’s benchmark Nikkei 225 closed 2.9% higher on the back of rallies in Kioxia and Tokyo Electron.
Shares in OpenAI investor SoftBank Group jumped 13.9% ahead of the company’s earnings release later in the day. Its share price had fallen to its lowest level in a year on Monday.
Stock indices in Hong Kong and Shanghai were also higher.
China’s exports in October climbed 35.2% from a year earlier, while imports grew 41.6%, according to customs data released on Tuesday.
That put the country on track for another record annual trade surplus, with the total for the first 10 months of 2026 already exceeding $1 trillion (€893bn).
Australia’s S&P/ASX 200 rose 1.1%, while markets in India were closed for a holiday.
However, SPI Asset Management's Stephen Innes said the gains did not suggest markets were back in rude health.
"The market rallied because the sellers stepped away, not because the entire buy-side suddenly rediscovered its courage," he wrote in a commentary.
"For the second consecutive session, the companies receiving the enormous capital expenditure cheques dramatically outperformed the businesses writing them. That is a potentially important development after last week's indiscriminate liquidation," he said.
"The hyperscalers remain central to the AI investment cycle, but the market is increasingly questioning the returns on the extraordinary sums being committed to new infrastructure.
"Equipment providers, optical networking companies and selected data-centre suppliers can still benefit from existing spending programmes, even as investors become more selective about the ultimate economics for the companies funding those projects."
In other dealings, early Tuesday, the US dollar rose to 157.91 Japanese yen from 157.90 yen. The euro slid to $1.1249 from $1.1266.
Oil falls on Iran peace hopes
Oil prices continued their retreat on hopes of an end to the Iran war.
Both main contracts fell more than 2.5% by 10:30 CET on Tuesday, extending Monday’s losses, when Brent dropped almost 6%. Brent was trading at around $90 a barrel, while the US benchmark WTI stood at about $84.70.
Both have lost around 20% this month as traders bet on a resolution to the more than eight-month-old conflict, which has sent inflation soaring and prompted central banks to raise interest rates.
US President Donald Trump said on Monday there was "positive momentum" towards ending the war after meeting Qatar’s prime minister at the White House. He said further strikes were "quite unlikely", although he kept the option open.
“Markets are increasingly taking the view that Donald Trump needs to forge a new path if he wants to save face from the midterm election washout, and that might mean finding a way to end the Iran war,” Mould said.
He added that this would, in theory, help lower energy costs, bringing relief to consumers and businesses.
