A look at the day ahead in European and global markets from

Ankur Banerjee

And just like that, we're back to staring at shipping routes

across the Strait of Hormuz after a fresh bout of tit-for-tat

attacks upended the tenuous U.S.-Iran ceasefire and clouded

long-term peace prospects in the Middle East.

While global markets broadly took the latest U.S. attacks on

Iran in stride, oil prices rose 2% as investors fretted about a

slower recovery of supply from the Middle East. Adding to those

worries, the U.S. reimposed crude sales sanctions on Iran.

The Strait of Hormuz, a key waterway for the transport of

Middle Eastern oil shipments to wider markets, remains in focus,

as it has been since the conflict erupted at the end of

February.

But for now, investors are hoping that the worst is truly behind

us and the gains in Brent crude futures will be

contained. Stocks mostly took a breather after an AI-led wild

ride in recent weeks, as investors brace for the earnings

season.

U.S. 10-year Treasury yields, which rise when

prices fall, climbed about 3 basis points to a one-month high of

4.565%, with higher oil prices raising inflation risks.

Focus will be on the minutes of the Federal Reserve's June

policy meeting later on Wednesday as traders gauge the mood and

tone of policymakers. Markets are pricing in the Fed to hike at

least once by the end of 2026 to battle inflation.

The spotlight will also be on tech stocks after a tumultuous few

weeks where the afterglow of the blockbuster IPO of SpaceX has

given way to worries about whether there is room for further

gains in the historic AI rally.

South Korea's SK Hynix launched a U.S. share sale to

raise 43 trillion won on Monday, with the stock due to start

trading on Friday, in what will be another test of investor

confidence in the sector.

The KOSPI index dropped another 5%, leading to a

short halt in trading activated by the stock exchange. These

halts are becoming increasingly common, underlining the

unprecedented level of volatility in the world's best performing

stock market.

Key developments that could influence markets on Wednesday:

* UK housing survey for June

* Federal Reserve minutes during US hours