European stocks and U.S. futures moved slightly higher on Monday as oil prices remained under pressure from the prospect of increased energy supply. This helped ease concerns over inflationary pressure, while investors shifted their focus to a crucial earnings season for companies linked to artificial intelligence.

Oil Prices Fall as Supply Shows Signs of Recovery

Brent crude fell 1.4% to around $71.10 per barrel, near a four-month low. The decline was driven by continued vessel traffic through the Strait of Hormuz, with around 160 ships reported to have passed through the area from Monday to Saturday last week.

At the same time, OPEC+ agreed to further raise its output targets by 188,000 barrels per day starting in August. The possibility of recovering oil supply has helped markets expect energy price pressures to ease, supporting sentiment toward risk assets.

European and U.S. Stocks Move Higher

Europe’s STOXX 600 rose 0.2% in early trading, while S&P 500 futures gained 0.5% after the U.S. holiday break.

Last week, the S&P 500 climbed 1.8%, while the STOXX 600 advanced 2.7%, as investors reduced their expectations for further interest rate hikes amid cooling energy prices. However, some areas of the technology sector, particularly chipmakers, remained under pressure.

According to Mohit Kumar, Chief European Economist at Jefferies, lower oil prices could support growth-sensitive sectors and countries that have underperformed over the past three months.

Focus Turns to AI Earnings Season

Investors are now paying close attention to the earnings results of companies tied to artificial intelligence, as concerns remain over a potential bubble in the sector.

This week, Delta Air Lines and PepsiCo are among the major U.S. companies set to report earnings. Meanwhile, Samsung Electronics is expected to draw attention on Tuesday, with analysts forecasting an 18-fold increase in profit.

In South Korea, the stock market cooled slightly last week but remains up around 90% so far this year, supported by strong AI demand and tight chip supply, which have pushed prices higher. The KOSPI index fell 0.5% on Monday, while Japan’s Nikkei was flat.

Notably, SK Hynix is expected to launch a U.S. listing on Monday to raise around $28 billion, making it an important test of the strength of the AI investment wave.

U.S. Dollar Firms Slightly as Markets Await Economic Data

In currency markets, the U.S. dollar index rose 0.1% to 101.04 after previously falling following weaker-than-expected U.S. June payroll data. The euro slipped 0.1% to $1.142, just above its recent 13-month low of $1.133.

The dollar also strengthened 0.5% to 162.23 yen, not far from its 40-year peak of 162.84 yen, as speculators continued to test the resolve of Japanese authorities over possible intervention.

This week, markets will monitor the U.S. ISM Services survey, speeches from several central bank officials, including Federal Reserve Governor Christopher Waller and ECB President Christine Lagarde, as well as the minutes from the Fed’s latest meeting, which are due on Wednesday.

Gold Edges Lower After Last Week’s Rebound

In commodity markets, gold was slightly lower at around $4,160 per ounce after rebounding 2% last week. The movement shows that investors are still balancing interest rate expectations, currency volatility, and geopolitical risks.

Conclusion

Overall, financial markets started the week with mildly positive sentiment. Lower oil prices helped ease inflation concerns and supported growth expectations, while European stocks and U.S. futures edged higher.

However, investor attention is now shifting sharply toward earnings season, especially companies linked to AI. If corporate results continue to confirm strong technology demand, markets could maintain their upward momentum. On the other hand, if AI expectations appear overly stretched, technology stocks may face renewed correction pressure.

Source: Reuters