GLOBAL MARKETS-Oil up on Middle East fighting while AI bulls carry stocks higher

A hike in Europe next week is all but fully priced in following data showing inflation accelerated further last month, while traders see about a 75% chance of a June rise in Japan. Foreign ‌exchange markets were broadly steady, ‌with the euro at $1.1627 and the dollar just shy of 160 yen at 159.86.

Oil prices rose for a third day running on ​Wednesday and the dollar was on the brink of breaking ‌the ​160 yen barrier as fresh hostilities flared in the Gulf after U.S.-Iran peace talks stalled. Brent crude futures rose 1% to $94.74 a barrel. The dollar hit 160 yen, then paused as traders became wary of potential Japanese intervention around that level.

S&P 500 futures were flat and ‌European futures slipped 0.1%, although the AI bull run pushed on unimpeded in Asia, where stock indexes climbed to record highs in Taiwan and Japan. South Korean markets were closed. The U.S. military said Iranian missile attacks on Bahrain, Kuwait and other regional targets were either thwarted or failed as diplomacy between Washington and Tehran made little headway.

Iran and the United States said last week that ‌they had reached a tentative deal to halt the war, but the two sides have yet to sign off on anything. "Last week ... the trajectory was towards some sort of ‌MOU and markets were high on the belief that that was coming," said Chris Weston, head of research at broker Pepperstone in Melbourne.

"Things are looking more precarious (now). It does suggest that people are coming back to the negotiating table with less scope to get that done and I think we're seeing some of those bets being unwound." Cryptocurrencies tumbled, weighed by selling at big bitcoin holder Strategy and talk that some investors were selling to free up cash for next ⁠week's SpaceX ​listing.

Bitcoin is down nearly 10% in three sessions ⁠and hit a two-month low of $66,123 on Wednesday. SpaceX plans to raise $75 billion in a blockbuster initial public offering, according to a source familiar with the matter.

In the tech space, the artificial intelligence theme seems impervious to war worries and ⁠Wall Street stock indexes eked small gains on Tuesday, led by AI. Shares in Marvell Technology soared 32.5% to a record high after Nvidia boss Jensen Huang called the chipmaker the next trillion dollar company.

AI gains ​have lifted tech investor SoftBank above Toyota as Japan's most valuable company and on Wednesday memory manufacturer Kioxia briefly pushed the carmaker, which topped the list for decades, into ⁠third place. US LABOUR DATA IN FOCUS

Bonds, which had rallied through Tuesday, were steady on Wednesday with the benchmark 10-year U.S. Treasury yield at 4.46%. Overnight data showed U.S. job openings increased by the most in five years in April, pointing to ⁠a ​resilient job market and offering little evidence the economy needs lower rates.

The U.S. services ISM and private payrolls figures are due later on Wednesday, ahead of labour market data on Friday. "In our view, the pickup in momentum across the U.S. economy over early 2026 could see the U.S. jobs report exceed downbeat consensus forecasts," Peter Dragicevich, Asia-Pacific currency strategist at payments ⁠firm Corpay, said.

"If realised, we think this may bolster the view the U.S. Fed could raise interest rates down the track, which in turn might see the USD strengthen." Markets, which ⁠had expected rate cuts before the Iran ⁠war, have priced in about 18 basis points of U.S. rate increases this year. A hike in Europe next week is all but fully priced in following data showing inflation accelerated further last month, while traders see about a 75% chance of a June rise in Japan.

Foreign ‌exchange markets were broadly steady, ‌with the euro at $1.1627 and the dollar just shy of 160 yen at 159.86.