Global equities advanced on Tuesday as renewed optimism around artificial intelligence lifted technology shares, while falling oil prices and bond yields reflected growing hopes of progress in U.S.-Iran negotiations to de-escalate the ongoing conflict.

Brent crude futures slipped more than 1% to around $94 a barrel, reversing part of the previous session’s gains, after comments from U.S. President Donald Trump suggested that discussions with Iran were still ongoing despite reports that Tehran had paused indirect negotiations.

European markets also moved higher, with the STOXX 600 rising nearly 0.8% in early trading, led by gains in technology stocks after a strong outlook from semiconductor firm STMicroelectronics. Investors continued to rotate into AI-related sectors as corporate investment in computing infrastructure accelerates globally.

A major catalyst came from artificial intelligence developer Anthropic, which confidentially filed for a U.S. initial public offering, intensifying competition with OpenAI and reinforcing expectations of a booming AI capital cycle. The move comes as Alphabet and other tech giants ramp up massive funding efforts to expand AI infrastructure capacity.

Market strategists say the scale of capital required to sustain the AI race marks a shift from cash-rich tech firms to heavy reliance on external financing. As one analyst noted, the industry is moving toward “cap in hand” market funding to support expansion rather than relying solely on internal cash flows.

U.S. economic data added another layer of support to sentiment, with the Institute for Supply Management reporting that manufacturing activity rose to a four-year high in May. The stronger-than-expected reading suggests firms may be front-loading orders amid uncertainty linked to supply chains and geopolitical tensions.

Despite the positive tone, futures for the S&P 500 and Nasdaq 100 edged slightly lower after both indexes posted their eighth consecutive record closing gains in the previous session. Analysts highlighted that such extended winning streaks are rare, underscoring the strength of the current rally.

In Asia, markets were mixed as Nvidia CEO Jensen Huang reiterated strong demand outlooks for AI chips while acknowledging ongoing supply constraints. South Korean equities saw sharp intraday swings, with major semiconductor names fluctuating between gains and losses amid profit-taking.

Bond markets reflected easing inflation concerns, with U.S. 10-year Treasury yields falling to 4.43% and German Bund yields declining as investors rotated into safer assets. The euro remained steady but still traded below pre-conflict levels as inflation data kept expectations alive for further European Central Bank rate hikes.

Gold prices also climbed, rising about 1% as investors continued to hedge against geopolitical uncertainty and macroeconomic volatility, reinforcing its role as a defensive asset during periods of market stress.

Overall, the session highlighted a market balancing act between powerful AI-driven growth optimism and persistent risks from geopolitics, inflation, and monetary tightening expectations.