European stocks closed sharply higher on Tuesday, reaching their strongest levels since March, as optimism grew that Washington talks could pave the way for an end to the war in Ukraine. The Eurozone’s STOXX 50 rose 0.90% to 5 486, the STOXX 600 gained 0.70% to 558 and Germany’s DAX added 0.50%. In London, the FTSE 100 edged up 0.40% to a record 9 194, supported by financials and miners.

Glencore and Rio Tinto benefitted from stronger copper prices, while JD Sports jumped more than 6% following a Deutsche Bank upgrade. By contrast, oil majors Shell and BP, along with defence contractors, weighed on the index.

Consumer discretionary stocks led the broader gains, with luxury groups LVMH and Kering rising around 3%, and carmakers Stellantis and Mercedes-Benz advancing over 2.50%. Mediobanca also rallied after receiving approval to acquire Banca Generali, a deal that will create Italy’s third-largest lender. Meanwhile, defence companies including Rheinmetall, BAE Systems and Thales fell more than 4% as peace hopes weighed on the sector.

The White House meeting, hailed by Ukraine’s President Zelensky as his most constructive yet with US President Donald Trump, bolstered hopes of security guarantees and a potential ceasefire.

In the US, however, Europe’s upbeat momentum failed to carry over as stocks pulled back on Tuesday as weakness in major technology names weighed on Wall Street. The S&P 500 fell 0.60% and the Nasdaq slid more than 1%, dragged down by sharp losses in chipmakers, while the Dow Jones retreated after briefly touching a record high earlier in the session. Nvidia fell 2.70%, AMD dropped 4.90% and Broadcom lost 3.70%, with Palantir tumbling 9% to become the S&P 500’s worst performer.

In contrast, Home Depot rose over 3% despite missing earnings estimates, as investors welcomed signs of stabilising demand in the housing market. Intel surged 8.70% following SoftBank’s announcement of a $2 billion investment, bolstering confidence in the company’s turnaround efforts. Attention is now turning to the Federal Reserve’s annual Jackson Hole symposium, where Chair Jerome Powell’s speech on Friday is expected to provide guidance on the September policy meeting and the potential for interest rate cuts.

Asian markets were largely subdued as Japan’s Nikkei 225 fell 0.38% to 43 546.29, after briefly touching a record high of 43 876.42 earlier in the session. Hong Kong’s Hang Seng Index declined 0.09% to 25 154.01, weighed down by losses in the technology and financial sectors. China’s Shanghai Composite slipped 0.01% amid cautious trading. Overall, sentiment across the region remained cautious, with key indices in Japan, Hong Kong and China edging lower.

South Africa’s 10-year government bond yield has held within a narrow 9.60%–9.70% range since late July, reflecting modest global movements as investors assess economic, monetary and geopolitical developments. Focus remains on the upcoming Federal Reserve Jackson Hole Symposium for guidance on US interest rates, alongside domestic inflation data, while uncertainty persists over the 30% US tariff on South African exports. At 19h35 SAST, the rand strengthened slightly to 17.67 against the US dollar. The All Share Index rose 0.05%, whereas the Top 40 slipped 0.05%, with the JSE Metals and Mining Index down 1.70%. 

Commodity markets retreated on Tuesday, with Brent crude closing at $65.68 a barrel, down 1.38%, and WTI crude falling below $63 as traders weighed the prospects of a Russia–Ukraine meeting. Oil prices have already dropped more than 10% this month amid trade tensions and rising OPEC+ output. Gold also slipped 0.38%, closing at $3 317.44 an ounce.