(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Global stock markets may just be weary of the back-and-forth in

the Middle East, but they latched onto a sliver of hope in the

still-raging U.S.-Iran conflict overnight. Reports of some

mediation efforts sent Brent crude prices back below $90 per

barrel, even as renewed fighting continued into its 10th day and

the conflict risked spreading.

I'll get into all that and more below.

But first, check out my column on why markets are likely hoping

new UK Prime Minister Andy Burnham succeeds, whether they agree

with his policies or not.

And listen to the latest episode of the Morning Bid daily

podcast. Subscribe to hear Reuters journalists discuss the

biggest news in markets and finance seven days a week.

TARIFF REPRISE

A playbook appears to have developed over the five months of the

Iran war where each new escalation quickly deescalates into

another round of talking. But markets may be a bit blasé this

time around, as the threat by Yemen's Houthi militia to block

Saudi shipping potentially opens a new front in the conflict.

Regardless, the dip in crude prices below $90/bbl on Monday was

enough to spark a decent rally in Asia stocks, with Tokyo and

Seoul stocks up briskly on Tuesday and U.S. futures in positive

territory too. Eyes are more likely trained on the big tech

earnings about to hit the Street, as Alphabet is due to report

on Wednesday.

Otherwise the focus this morning was Donald Trump's new tariff

salvo against Canada and new British Prime Minister Andy

Burnham's surprise pick for finance minister. Trump re-opened

regional trade wars by saying he would apply 50% tariffs against

some $20 billion of Canadian imports next month, goods such as

wine, cement and clothes that account for some 5% of Canadian

exports south of the border. Canadian PM Mark Carney said he

would double down on negotiations to resolve the issue.

In the UK, Burnham said he would appoint former defence minister

John Healey as his new Chancellor of the Exchequer, quashing

reports that interior minister Shabana Mahmood was due to get

the job. This raises speculation that defence spending may be

carved out of the UK's standing fiscal rules. Burnham's team

also announced moves to cut tax on electricity prices, which

would be funded by scrapping a digital ID program. That may help

lower UK inflation a bit later in the year, taking pressure off

the Bank of England to tighten policy.

CHART OF THE DAY

As market anxiety rises about the pace of AI-related demand

growth, megacap Alphabet is the first of the so-called

hyperscalers to report quarterly earnings this season. On

Wednesday, it's expected to report an overall 21% increase in

revenue to $117 billion from $96 billion a year ago, with annual

growth in its cloud revenue nudging higher to a whopping 64%.

Alphabet shares have lagged its rivals in recent months, but

its stock got a boost on Monday from reports that Google is

developing a new server chip that would incorporate elements of

its Gemini AI model directly into the hardware.

TODAY'S EVENTS TO WATCH

* Philadelphia Fed's July non-manufacturing business survey

* Corporate earnings from GM, Halliburton, Hasbro, MSCI,

Northrop Grumman, Marsh & McLennan, DR Horton

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Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

(Writing by Mike Dolan)